BioCryst Pharmaceuticals, Inc. Aktie

Okay. Great. So good afternoon, everyone. Welcome back to the Bank of America Health Care Conference. I'm Tazeen Ahmad. I'm one of the biotech analysts here at the bank.

It's my pleasure to have with me our next presenting company, BioCryst Pharmaceuticals. Sitting up here on stage with me are 2 members from the management team. We've got Babar Ghias, who is the Chief Financial Officer; and Sandeep Menon, who is Chief Research and Development Officer.

Gentlemen, thank you for making the trip out West.

Thank you, Tazeen, and thanks for having us.

So maybe as an overview, just give us a quick description of BioCryst as it stands today. Some people know it in various different forms, but talk to us about what you found appealing about it because you're one of the newer members to join the company. And we can talk about some of the important drivers of the stock after that.

Fantastic. Well, thanks again for having us. Before I begin, I'll just remind that we will be making some forward-looking statements. So I encourage you all to look at our SEC financials for the GAAP to non-GAAP reconciliations as well as risk factors.

With that behind us, what attracted me to BioCryst, it's a company at a phenomenal inflection point. ORLADEYO has -- it's in sixth year of launch and continues to do extremely well in terms of how we're building that market, especially in the face of several approved products in the space. So that naturally the safety of a growth engine behind a lead product that really excited me.

And then what happens after that? And I think if you look about the decisions that we have made in the last 9 months that are pretty reflective of how the strategy is evolving behind ORLADEYO. Our vision really is to build a high-growth innovative rare disease biotech with multiple products on the market by 2030.

And now that we are very fortunate to have navenibart, which is a Phase III program in our pipeline. And then back in navenibart, we have another very interesting and promising program in Netherton syndrome, no approved therapy, highly, highly devastating rare disease.

So I think all of that -- and then basically, with Sandeep just very recently joining us, and hopefully, he shares the same enthusiasm in terms of the inflection point, we are at a very interesting and position now to take all the momentum that we have behind from ORLADEYO to channel that into building like next product candidates and then also converge them with our internal discovery pipeline because historically, BioCryst used to only rely on internal engine. Now we're in such a strong financial position based on ORLADEYO's momentum that we can be much more creative in terms of building a really diversified rare disease biotech.

Okay. So you guys have also really been busy with business development. How do you make a decision that some asset is worth bringing inside the company? So we can start off with the Astria acquisition. We can also talk about some of the partnering decisions that have been made recently as well.

Yes. So I'll just give you -- you're absolutely right. In the 9 months that I've been here, we've been really busy. I'll start with what sort of started this, what was the catalyst.

So we, as a small biotech company had built a really good team in Europe. And what we soon realized that one product was not going to be enough to build scale basically as a single product company, right? And we were very fortunate that based on the stuff that we were doing over there and the momentum that we also had in the ORLADEYO in Europe, we were approached by NG to divest that business at very attractive terms.

What that enabled us was to actually clean up our balance sheet and improve our financial profile because Europe, even though top line was increasing, like I said, we were not at scale yet that we could make profit out from there. So that kind of freed that space on our U.S. financials to become much more profitable than we already were.

That enabled us to bring in Astria Therapeutics. And like I said, at this point, it's with the vision of having multiple products by 2030, it was not going to come from an internal pipeline given that's early in nature. So we knew that we had to do something. Astria was something that we had actually been looking for many years because there was such a natural synergy of having the only oral in the market and potentially the best-in-class injectable product with the same commercial organization that made a ton of strategic sense as well as financial sense to bring those 2 together, and we were very lucky to have that in our portfolio.

Moving on to what happened, we were never going to build in another European thing, and we went through a process where we had a lot of interest because of how promising that program is from European buyers. And after a careful evaluation and analysis, we thought that it made sense to actually put it back in NG's hands because you don't want 2 brands to be competing against each other and disharmony around the brand promotion strategy. And then most importantly, it is a theme that we had curated over many years. So we had a very high conviction in the NPV value of that deal. So that's kind of how it came about.

To your next question, I think I would say that how we think about the decision, we are -- while our first and second asset are in HAE, we are not an HAE-centric in the sense of only an HAE company. We view ourselves as a broad rare disease company. Naturally, the first product is in HAE. The second one is coming in HAE because we didn't want to take that risk.

Netherton syndrome is a classic rare derm disease. And when we think about business development strategy, we are looking at a broad portfolio. But at this time, it makes sense for us in terms of the infrastructure that we have built and the leverage that we have in business to look at more later-stage opportunities because I think we don't want to take like early development risk on something new because there's also a balance sheet perspective that we have to think about.

So as we think about our BD strategy and think about what comes next, it will tend to be late stage. It will tend to be with a potential product candidate that gives us an opportunity to bring more stuff into the 2030 time frame.

Okay. So on Astria, this is an injectable. So when this drug launched before you were a member of the team, the main distinction was that this is an oral. Everything else is an injectable and HAE for prophy. And this is something that's going to be differentiated, which has proven to be. So how did the thinking evolve that if you needed a second asset that an injectable -- less frequently injected, of course, but nonetheless, one that was an injectable would be complementary to what you already have?

Yes, absolutely. And I think we are obviously, in many ways, the pioneers of the switch market in HAE because it is predominantly a switch market as you've had experience as well. Now if we go back in time and said that like if the first approved therapy was an oral therapy, there will be more people on oral today than they are on injectables. I think the way the market has evolved, you had recombinant therapies, you have C1H replacement therapies, plasma kallikrein inhibitors.

So the way it has evolved, the way we see the market today, there is a structural segmentation. There are patients who don't mind basically taking a daily pill and there are patients who -- you know who basically are okay with an injectable. I mean the proof is -- goes back to the stickiness as well to some extent. There's still patients who are taking Cinryze as inconvenient a therapy as that is. It's an IV that you have to go through.

So I think the way we see the market, there are patients who want the oral and are okay, and then injectable where by our count, there's about 5,000 patients on injectable and several approved therapies. But there is an incredible amount of demand for an injectable that is dosed less frequently. I think that's where the value proposition we see of navenibart.

And [ Takhzyro ] has -- in terms of our work that we've done and we've -- if you show it to docs and they look at lanadelumab, they look at navenibart blinded profile and they're like, yes, this is a fast-acting lanadelumab with less injection site pain.

So we feel that right now, we are the only oral in the market. And by the way, for peds, I know Pharvaris is upcoming with the thing. But in the peds, as you saw last year, we got the peds approval as well. So we're the only product, oral formulation with 2 and up approval. So that we will have for our main pillars. And then we will also have the best-in-class injectable product when potentially navenibart gets approved. So we see that as complementary based on how the market has evolved over time.

Okay. So as ORLADEYO continues to mature, what's your view of what peak sales could be by the end of the decade?

Yes. So I think we have laid this out very clearly or at least I hope we have laid this out clearly in our investor deck that before we had sold it to -- we sold our European business, we were -- we had said that it is on a $1 billion peak potential and Europe it was contributing.

At that point in time, we did not have pediatric in our portfolio. We got rid of the European business, but now we have pediatric, which is an incredibly interesting market dynamics in terms of how it is doing that.

So from this point onwards, we feel that we need to be doing about 150 patients, net patients on average between now and 2029 to get to that $1 billion mark. To put things in context, historically, we've been doing over 200 net patient adds every year. And we feel that it's not going to be linear, but it's very achievable.

Like I'll give you a stat that most recent -- in the most recent quarter, we continue to not just see like high prescription demand, but 6th year of launch, we're still adding new prescribers, which is pretty impressive when you think about -- because historically, we used to give that stat and it is in line with the historical numbers. But we're very excited that we're still adding new prescribers and kind of like how are we growing that market. And so I think we're still maintaining that long term, it's that $1 billion path is highly achievable.

Okay. So as you think about the evolution of the competitive landscape for prophylaxis, you mentioned Pharvaris. So how do you think about the market with another potential oral that can come on?

Yes. And again, going back to the evolution of the market, this is not a winner takes all market. I think it's like you understanding your patient base. Naturally, the one thing that I would say, people that take HAE -- ORLADEYO, they are extremely well controlled. So either it works for them or they move on because there are so many approved therapies that are already there.

So we are not -- nobody is insulated from more competition. But as we see it, and you know it that we do extensive market research and we do every competitor, the best product profile and we do this sort of Monte Carlo simulation analysis. We feel that when we -- when Pharvaris gets approved, we will -- for new patient adds, we will see competition. But if you're already very well controlled on a once-a-day pill, I don't know what more that another once-a-day pill adds because our data, and we've generated this long-term data that there's one thing is a regulatory endpoint or regulatory marker that we had of efficacy, but what's the real-world experience of patients.

And the data that we've generated, these patients get over 90% attack rate reduction and then also mid 95%, mid-90s percent compliance because it's working very well for them. So we feel that the base business is very well protected. The new patient adds, yes, we will be competing for sure. But the other thing is we'll have 8 years of launch by that -- launch experience by that time. So knowing our patient audience really, really well will matter a lot.

Can I add something here?

Sure.

So there are 2 other -- 2 or 3 things that Babar nicely summarized, right? One is based on the real-world data, what we are seeing is it's almost like a functionally mean attack rate of 0, right? So functionally, patients are fine, you take the medicine.

Second thing, as a physician, as a prescriber, why would you change something just for some point estimate when you have got history with 7 years or 6 years of data and such a big safety database, right? So that would be the -- at least the 2 trigger points for us basically that this is going to be for us an increasing market. And these are -- there's only so many physicians that are prescribers.

So for them to try things new on a new patient, I'm not saying that will not happen, that will also happen, but it may not be as much as what it's made out to be, at least based on my experience as both as a prescriber and a clinical developer here. Yes.

Okay. So what about other mechanisms of action? For example, there's gene editing that's being explored for HAE. How would you consider that falling into the competitive landscape?

Yes. So gene editing, to me, when I'm thinking about gene editing here, Tazeen, is basically you just have to wipe off and almost get to a full cure, right, not only just functionally, but the mutations are out of picture in terms of the treatment. So at least, again, I don't want to comment on Intellia data, but the expectation of a gene editing or a gene therapy would be that it is full -- not only functional cure, but full pathological cure.

I don't see that yet in terms of the data. So from -- for a prescriber and also for an insurance to pay that money for something that -- with the pill or others that are fully controlled. And many of these gene editing or gene therapy will have a longer commitment for safety database because we still don't know what's happening in the system.

So that's some -- and especially in a therapeutic area where you have got so many different options. It's not an option. It's not like a Huntington's disease or somewhere where you don't have much options, right? Here, people have got a lot of options. So to me, I'm still pretty mixed about gene editing and gene therapy, at least for this indication.

Okay. Well, let's talk about your own pipeline products with Astria. So how do you think a less frequently dosed injection could compete against orals? And maybe how are you thinking to the point that you made, unless it's curative for gene editing, how do you think that argument could change with an infrequently dosed injection? And just remind us what the dosing frequency is going to be?

Yes. So it is basically -- and Babar, you have to add more.

Yes, sure.

This is -- just to remind people, it's my fifth week here. So I guess -- so from a perspective of what you get from the injectables, right? I think at least the injectables that are in the market, it's much more frequent. That's number one. The second one is also they have got high ISRs. Injection Site Reactions are much higher.

So what we are bringing is once in 3 months therapy, number one, in terms of convenience. The second one is a tried and tested mechanism that we already have been very successful. The third -- and the mechanism actually implicated in the disease. And thirdly, we are bringing in less ISRs based on whatever data we have. We don't have a lot of site -- Injection Site Reaction. So we are bringing in that profile for convenience, safety and also mechanistically much more closer to the site of action.

Yes. The only thing I would add is when we do a lot of market research, the tipping point is 3 months with 6 months kind of like another add-on on top. I think going from 12 injections a year to 24 injections that are currently with like different things versus 4 or possibly 2 is a game changer. And you're seeing some of that same analogs in, call it, myasthenia gravis where there's a lot of incumbent therapies and the newer ones are like more longer dated.

Yes.

So our market research showed that, that is a huge game changer. And like I said, this market is such -- there's such segmentation that it's not just an oral or it's not just an injectable. It's based on real-world experience. And patients are okay with taking injectable. I think the benefit and the beauty of navenibart is you get and forget. And that's really what we're really excited about in this space.

Okay. Just remind us when the next data set is to?

Data set for...

Navenibart.

Yes. So it's going to be end of year next year is when we are going to do the BLA filing.

BLA filing at the end of next year. But in terms of guidance of when top line data happens?

So top line data will be around that time. Basically, it all depends upon, so we are also discussing with the FDA in terms of what should be the right time to divulge the data. So we want to make sure we are absolutely compliant regulatorily to disclose any data outside because this is a Phase III pivotal study.

So as you know, we have said that by middle of this year, we will be enrolled.

Yes.

And what we have been extremely pleased with that even with this acquisition, there was -- we did not skip a beat in terms of execution. It is the largest HAE study. And naturally, it's the first one of its kind in the sense there's a 3-month dosing and a 6-month dosing.

So prior to that, when Astria had been guiding basically was Q1 of 2027. I think we're still working with the FDA because of this dynamic of 6 months and 12 months. But what it doesn't change is our BLA time line. I think what we want to make sure is that we are complying with FDA's requirement for this 6-month dosing, and we are able to do the right thing for the trial. So I think that's something that we are working on.

Yes. So it's a unique data package where you have got in the 6 months that everybody has done. We have got 12 months. So we are in a real advantage. It's not only to Babar's point, not only the largest study, but also the longest study in HAE.

So what would be good data in terms of attack prevention?

So I want to make sure that we don't -- we are not hung up in like point estimates. What our current point estimate is 90% to 92% is basically what we got in the Phase II study. Obviously, between Phase II, Phase III, there's always going to be some translation that happens and it is going to be a randomized trial and everything.

But Tazeen, what I mentioned before, it's the whole totality of the data. It's not just the point estimates. As a physician and a prescriber, people will not care whether it is between 90% or 80%, 85%. People will care about what you bring to the table in terms of the convenience. Is my Injection Site Reactions basically going down. And at the end of the day, whether patients are -- it's helping the patients or not. So that would be the way we look at it. It's a high probability that we will be hitting the clinical meaningfulness in terms of what we have already seen, right.

And I think just to add on to that, what the industry is a regulatory benchmark, 90%, 92%, which, by the way, we were really, really excited that third and 3 months and 6 months is not differentiating. The other stat is noting is the attack 0.16 attack per month, which is basically going to that. I think that's becoming more and more relevant at how well controlled I am that equates to less than 2 attacks a year. And I think that's kind of like the durability of the potential drug candidate with the long-term dosing profile. I think that's what we're really excited about.

So as it relates to breakthrough attacks for patients that are on prophylaxis, do patients tend to be heterogeneous? And like can you -- what is an average number really mean of attacks per year?

So it all depends on the patient population. Basically, what we have started, at least our trial, the way it is designed is making sure it is absolutely contemporary in terms of the average attack rates have gone down over a year, right? So our screening period or the running period, we have got a criteria to screen in the right set of patients so that we are not -- first of all, it's much more of a precision approach in terms of having the right population in the study because obviously, to your question about heterogeneity, there's always going to be heterogeneity in response. But we are trying to do our best in terms of enrolling the right set of patients in terms of filtering through our running period.

Okay. On the pediatric front, can you talk to us about the granule supply disruption...

Absolutely.

And where that stands?

Absolutely. And just to clarify, it's not a safety or efficacy issue or an FDA issue. It's a very isolated quality batch release issue that we found a little bit late in the process as we were getting ready to ship product. And just out of prudence and you just get one chance to get your launch right, we want to make sure that the patient experience has been -- is really, really good because I'll talk a little bit about where we stand overall.

We're still working on that root caught analysis -- root cause analysis, and we will have more information in Q2, but it's not something that requires like an engagement with the agency or anything like that. I think it's just a quality specs issue that we were just trying to solve for, which we'll have more information.

Having said that, as you know, we have 4 strands, and we have been receiving prescriptions for all 4 strands, which is very good. And there is a lot of excitement for this product. And what we are able to do in the meantime is collect the prescriptions and then our really, really strong patient services team can actually start the background process with respect to insurance verification and all of that. So once we actually have product supply, we're ready to go. So scripts are still coming in, and they are coming in at like a really, really nice clip.

Okay. So how should we be thinking about nuancing second quarter versus third and fourth as it relates to this issue?

Absolutely. And just to remind you, when we provided guidance at the beginning of this year, $625 million to $645 million, peds was actually not a meaningful part of the -- of that guidance and allow me to explain why because there's a paradigm shift that we have to go through in peds. And I just want to make sure that we were a little bit conservative on that because we haven't seen that paradigm shift when we put the guidance.

And what that means is there's about 500 diagnosed patients in peds. I think our estimates show that they could be double that population that could -- as you know this quite well, you get one drug approved and all of a sudden, the net widen. So there's about 50 -- 500 patients it's more tilted towards acute than prophylactic, which, again, going back to the HAE origin days, you had more acute versus less prophylactic and now it's flipped over.

So I think there's 2 opportunities: a, more increasing the size of the patient population because these are -- our APeX-P trial showed that the onset of symptoms starts as young as like 2.5 to 3 years of age and parents actually delay the decision because they don't want to find out. So I think while they -- and then they come back and they say, yes, my kids were showing the symptoms of HAE, but I was delaying that decision. So I think there's a huge opportunity to increase that.

And then naturally, there's basically the split from acute to more LTP therapy. And the fact that we will -- we are the only -- right now for 2 and up, there's only Takhzyro approved, which is -- obviously has a lot of ISRs. So this convenient dosing formulation will be a huge advantage.

Again, 2026 is not going to be a big contributor, but it is part of our plan as we go to that $1 billion potential. So -- and to your point on Q3, Q4, we can't wait to be on the other side of it because the demand is good, and we'd love to see that those patients get converted into paid patients.

Okay. So maybe let's spend a few minutes just talking about pipeline. You've got a Netherton's program. Just remind us where you are on that and why mechanistically it makes sense to look at it?

Yes. I'll start with the mechanism first, right? The mechanism here is KLK5 is implicated in Netherton syndrome, number one. The second one is whether this is still a severe skin condition, we need to make sure that the drug is reaching the skin. And what we have shown in terms of our healthy volunteer study that it is reaching the areas of interest where the target actually is.

The third one is now we are testing it on the patients. We have completed a small clinpharm kind of dosing study kind of a thing, which is our Part 3. And now we are starting to do our PoC trial, where we will be actually measuring the real clinical endpoint up to 12 weeks. So that's the -- a 12-patient study, and it's on track to deliver the end of the year, it's the PoC results basically. So we will stay tuned. Hopefully, we will have some good news to share.

Okay. Just remind us of what the data needs to look like in order for you to move forward with it? And also, was this an expensive study to run? Just trying to get a sense of the type of investment the company wants to be taking on internal pipeline right now?

Sure. So what good looks like, there is nothing in there for these patients. And if you look at these patients and you talk to them, they have got such an unmet need for them, even any improvement is supposed to be very, very clinically meaningful. So that's -- I'm not to say that we will not be aspiring for more. We'll definitely look for a meaningful change that is clinically impactful for the patient, helping the patient quality of life.

So -- and in terms of your -- what was your next question, Tazeen?

The investment...

The investment that you...

Yes. I think you can share...

I don't -- I think it's not a very expensive study. I think naturally, it's a fusion protein, so there is some CMC. The other thing is there's nothing approved for this patient population. So you also want to be making sure that you have proof of clinical activity before you take the next round of high investment.

I think to Sandeep's point, by the end of the year, one way or another, we'll know if we have a product. What gets us excited is if there is clear signals, naturally, as you've seen more of the recent rare derm, there is precedence that things can move pretty quickly. And I think that's when we feel that like if we actually have a product, then we can naturally then because we'll have potentially another product candidate that could get -- that could hit our profile before 2030.

So I've...

It's really underdiagnosed as well. It's underdiagnosed population.

So outside of Netherton, would you consider looking at other derm indications?

Yes. And I think this goes back to the overall strategy. I think the -- we have built this engine, people think that it's just a commercial uplift, right? I think launching a drug is just an entire organizational uplift. We've already built that an enormous phenomenal patient-centric commercial organization.

So this is a classic rare disease, much like how HAE was, people thought 2,000 patients, whatnot, market continue to improve. Are there other adjacencies, whether it's rare derm or other rare autoimmune diseases or inflammatory pathways? I think we are open to like looking at that. And now with Sandeep, who just joined us, we'll basically try to just define our strategy a little bit more crisply.

Okay. And so if we think about the rest of the pipeline for the company, what other things do you think investors should be looking out for?

I think as you know that in terms of like how our new evolution, the one thing that we want to emphasize for investors is we want to make quick decisions. As you saw avoralstat, I'm not saying whether it was quick or not, but we decided that, hey, this is not a viable path forward.

You mean in diabetic macular edema?

Exactly. It's not a rare disease indication. And this is not something for BioCryst to basically develop and especially in light of the landscape development landscape.

I think what we are very excited about the 2 programs right now. What we will be going forward doing is just being very disciplined about what we bring to the market next, whether there's a white space or there's a product differentiation and be very crisp about like what we can actually deliver from our pipeline. So I think for now, I would encourage you to focus on our 2 lead programs that we have. And then naturally, as we evolve our pipeline, we'll provide more updates.

Okay. And then last question, what's your view on external business development, bringing in assets?

It's -- you think about...

Beyond Astria?

Beyond Astria. If you think about our 3-leg strategy that we have, just to remind everybody, ORLADEYO has a very long durational IP. The composition of matter is September 2035. And the composition of matter on the salt is up to 2040. And we're not adding a lot of -- we're not actually -- our commercial infrastructure is steady state.

Add on to that, navenibart, it's the same commercial infrastructure and that IP goes until 2042. So over the next several years, we will be generating a lot of cash. We are already a cash flow generating business today. We are progressing these assets.

And then the third is like what do we do for cash? Every capital allocation strategy, whether it's new business development, late-stage assets and even potentially like buybacks of shares could be on the table in terms of how we deliver that. So I think BD will be a core part of our strategy to complement some of the internal and external. But the one thing that I would say is like in the short term, we are not adding risk from a BD strategy because I don't think that will sit well at the stage of the company that we are at.

Yes. Okay. You were going to say something?

No, completely aligned. Usually R&D leaders are not.

Good to know. All right. Well, we're out of time now. So thank you for joining us, and I appreciate you making the trip over. And again, we're looking forward to continuing to working with BioCryst and looking for the next data updates and launch trajectory continued.

Thanks, everybody, for joining.

Thank you so much for having us.

Good day, and welcome to the BioCryst First Quarter 2026 Earnings Conference Call. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Nick Wilder. Please go ahead.

Good morning, and welcome to BioCryst's First Quarter 2026 Corporate Update and Financial Results Conference Call.

Participating with me today are President and CEO, Charles Gayer; Chief R&D Officer, Dr. Sandeep Menon; and Chief Financial Officer, Babar Ghias.

A press release and slide presentation about today's news are available on our Investor Relations website. Today's call contains forward-looking statements, including 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. For additional information, including a detailed discussion of these risks, please refer to Slide 2 of the presentation.

In addition, today's conference call includes non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures against the most directly comparable GAAP financial measure, please refer to the earnings press release available on our Investor Relations website.

I'd now like to turn the call over to Charlie.

Thanks, Nick. 2026 is off to a very good start for BioCryst, marked by strong execution on our commercial and development programs, the smooth integration of Astria Therapeutics and disciplined management of our finances. ORLADEYO net revenue of $148.3 million for the quarter was right in line with our expectations, and monthly new patient prescriptions have tracked slightly ahead of 2025 averages. The pediatric launch -- pediatric indication launch is just beginning, but early signals confirm the need for oral prophylaxis for kids with HAE.

We have received prescriptions for each of the 4 product strengths of ORLADEYO pellets, which demonstrates that even younger children need prophylaxis. We are committed to bringing oral prophy to the many kids who need it. We have also recently discovered a manufacturing issue that will delay the first product fulfillment, and our team is working closely with our manufacturing partner to identify the root cause. We expect to have more information about the product readiness later this quarter, and we do not expect this delay to affect our revenue guidance for 2026. We look forward to bringing ORLADEYO to the kids who need it as soon as possible.

The pediatric indication is exciting, but it does not distract our team from driving new patient demand for ORLADEYO capsules. We are pleased that new prescription demand for ages 12 and up remains consistent with our quarterly averages since launch despite new competition. Physicians and patients continue to trust ORLADEYO as an effective and proven option for HAE prophylaxis.

Turning to our pipeline development. Progress on the pivotal ALPHA-ORBIT trial for navenibart has exceeded our expectations. Enrollment will be completed at the -- by the end of next month and at approximately 145 enrolled patients, ALPHA-ORBIT will be the largest pivotal trial ever for HAE prophylaxis. The speed of enrollment is a testament to our team's execution as well as the attractiveness of navenibart profile. Our Phase 1 study for BCX17725 in Netherton syndrome is also hitting its stride. Investigator enthusiasm has been strong. Patients have started dosing, and we are on track to have proof-of-concept data by the end of the year in this high-need rare disease.

I am thrilled that Dr. Sandeep Menon has joined us as Chief R&D Officer last month. We're making great progress in our pipeline and adding Sandeep makes us stronger. He has a track record of disciplined and successful drug development, and he shares our vision of building great value through serving rare disease patients.

I'll turn it over to Sandeep to introduce himself.

Thank you, Charlie. I'm very excited to be joining BioCryst at this important inflection point in the company's evolution. The company is in a unique position of strength, especially from our strong performance of ORLADEYO. It's not just the commercial excellence that drew me to BioCryst, but the commitment to rigorous science to improve patient lives.

I see a tremendous opportunity to build on the momentum that ORLADEYO has delivered as we guide the next wave of programs through the clinic. Navenibart, our injectable plasma kallikrein inhibitor for HAE prophylaxis will complete enrollment in the ongoing pivotal Phase 3 ALPHA-ORBIT study by the end of June this year. This keeps us on track to submit a regulatory filing in the U.S. by the end of next year. Navenibart has generated compelling clinical evidence so far. In the long-term open-label ALPHA-SOLAR study, it recently demonstrated 92% and 90% mean attack reductions in the 3-month and the 6-month dosing regimens, respectively.

We now have a great opportunity to bring potentially best-in-class injectable to HAE patients that will complement our best-in-class oral ORLADEYO. Moving on to our next program, BCX17725, which is a KLK5 inhibitor, a potentially first-in-class therapy for Netherton syndrome, a very severe skin condition with no targeted or approved therapies for patients.

I'm happy to share that we have started dosing patients in Part 4 of the ongoing Phase 1 study. Part 4 will enroll up to 12 patients with 3 months of dosing, and we expect to report this data by end of this year. Beyond BCX17725, we will continue to be disciplined in what we pursue, both internally and externally focusing on rare diseases, which play to our strengths. I'm excited to have the opportunity to shape the next chapter of BioCryst's growth. We have a proven track record in HAE, exciting assets progressing in the clinic and now a clear strategy for further expanding our presence in rare disease.

I look forward to updating you on our continued progress over the course of the year. I will now transition to my colleague, Babar Ghias.

Thanks, Sandeep. In my remarks today, I will be referring to non-GAAP figures, which are adjusted for revenues and expenses related to our European ORLADEYO business, stock-based comp and expenses related to the acquisition of Astria. This acquisition was classified as an asset acquisition for accounting purposes. And as a result, we recorded an in-process R&D charge of $698 million in Q1 as well as some other transaction-specific charges. I encourage you to review our press release for additional details on these adjustments. We believe that non-GAAP figures provide a clearer view of the strength of our business on a forward-looking basis, and we encourage you to focus on these metrics in your analysis.

With that said, we are off to a strong start in 2026 with first quarter results reflecting continued momentum in ORLADEYO, further demonstrating the product's durability in an HAE market where there are increasing options for patients. During the quarter, not only did we deliver strong top line growth, we also posted a strong non-GAAP operating profit. We are pleased with the consistency of our profitability trend that is adding to our strong balance sheet position.

Additionally, we have been very pleased with the overall integration of Astria Therapeutics into BioCryst family. This process has been running ahead of our expectations. This demonstrates that our team can, in the future, not only do transformational BD, but also integrate seamlessly.

To shed more light on our financial figures, our non-GAAP Q1 2026 total revenue increased approximately 17% year-on-year. Since other revenues include contribution from RAPIVAB and licensing revenues, I would draw your attention to the ORLADEYO revenues of $148 million, which increased 21% year-on-year, excluding the European divestiture impact. New prescription demand is strong, and we continue to see growth in prescribers even in the sixth year of launch. We remain very excited about the future growth prospects for ORLADEYO as more prescribers get experience with the pediatric formulation and the commercial team continues to reinforce and expand the value proposition of ORLADEYO.

In Q1, our non-GAAP operating profit came in at $54 million, an increase of 25% year-on-year, further demonstrating our ability to convert strong top line growth to bottom line growth. R&D costs increased in Q1 2026 versus the prior year, as you would expect, since we are now consolidating the costs related to navenibart. To refresh from the last call, we anticipate that 2026 R&D costs will increase over 2025 as we complete the ongoing Phase 3 trial and BLA-enabling CMC activities for navenibart.

With the addition of Sandeep to our team, we will continue to refine a focused and disciplined R&D strategy to enhance our portfolio. To that end, we will continue to evaluate internal programs that do not make viable business sense. And as part of that evaluation during Q1, we decided to discontinue the development of avoralstat in DME. Our sales and marketing expenses for the quarter were $37 million on a non-GAAP basis, down slightly from Q1 2025. We are very pleased that our sales and marketing structure is at steady state. And while there may be some smaller increases in variable expenses, the current team is well-sized to support continued ORLADEYO growth.

We anticipate sales and marketing expenses supporting our HAE franchise, ORLADEYO and navenibart upon potential approval as a whole will be very stable and poised to deliver substantial returns. Our G&A expense increased slightly by $1.8 million over Q1 2025 on a non-GAAP basis. This increase was primarily driven due to incremental overhead with the closing of Astria. We will continue to monitor our G&A over the course of 2026 and explore further areas of efficiencies.

Driven by our strong operational results, we ended the first quarter with substantial liquidity of approximately $261 million in cash and investments despite funding part of the Astria purchase price from our balance sheet. During the quarter, we also closed on a senior credit facility of $400 million to fund the remaining cash portion of Astria acquisition, along with approximately 37 million BioCryst shares issued to Astria shareholders.

Our cost of capital decreased compared to last year due to our strong financial position, and you will notice the benefit year-on-year in our interest expense. Earlier this week, we finalized the license agreement with Neopharmed Gentili to commercialize navenibart in Europe. We are pleased to be collaborating with NG on this transaction. A team that carries a unified vision to benefit people living with HAE and a commercial team that carefully developed over many years before transitioning to NG as part of our European divestiture last year.

As part of this deal, we will receive $70 million in cash upfront and up to $275 million in future regulatory and sales milestone, along with tiered royalties on net sales ranging from 18% to 30% overall. This will increasing -- meaningfully strengthen our balance sheet in the near to medium term and naturally the downstream economics will be attractive to our overall financial profile. On a pro forma basis, including the net proceeds from the license agreement, our liquidity position stands at a total of $331 million as of March 31, 2026. This attractive position allows us to evaluate a wide range of capital allocation strategies to maximize value to our shareholders.

Moving on quickly to guidance. As Charlie mentioned, we are maintaining expectations for full year 2026 ORLADEYO revenues to be between $625 million and $645 million. We expect full year 2026 non-GAAP OpEx to be between $450 million and $470 million. We continue to execute well. And as the year progresses, we will guide the Street of any changes. In closing, we have entered 2026 with strong momentum and are pleased to see strong trends in early Q2.

Our goal is to keep driving top and bottom line growth, advancing our pipeline through both organic innovation and selective disciplined BD to accelerate our impact in the rare disease space. We are delighted to be sharing these positive business updates with you all today.

And operator, we are now ready for the questions.

[Operator Instructions] Your first question today will come from Jessica Fye of JPMorgan.

This is [ Abdullah ] on for Jess. Just 2 questions from us. What are your expectations for the deucrictibant XR's pivotal readout? And what profile do you expect? And then what are the latest trend -- what are your latest trends on paid rate in each payer segment?

Sure. For deucrictibant, as we've said before, when we do a lot of work to try to predict the future. We have forecasting models that have proven to be really accurate launch to date, really predicted the growth of ORLADEYO. We always give our future competitors their best profile. So what we assume is deucrictibant will have very good efficacy when they report out in Q3. And that's built into our future forecast. And we still believe that ORLADEYO is on a path and will reach $1 billion in peak sales.

And as far as the trends in the paid rate, we're still -- this year, we're still in the blizzard season where we go through all the reauthorization. Every year, it moves a little bit into the future as patients go through this process. So we're still in that process. We'll comment more at the end of Q2. But we're having really good success converting patients from long-term free product to paid product. So we're progressing as we expected.

Your next question will come from Tazeen Ahmad of Bank of America.

This is Jeremiah on for Tazeen. Maybe a couple of questions from us. Just first on the navenibart out-licensing deal. Can you maybe just help us understand how much of that $275 million milestone pool is tied to regulatory versus commercial thresholds? And then just where you expect that royalty rate to settle at scale? And then maybe a question on pipeline, especially considering the prioritization of avoralstat. Just wondering, we haven't heard many updates about the complement pipeline in some time.

Just wondering what are the next key decision points for bringing those programs forward?

Babar, you want to take the royalty question? I'll cover the pipeline.

Yes. So I think at this point in time, we're not necessarily breaking out the milestones and think we're very excited that upfront is a very sizable upside for an asset at this stage and naturally in sort of in line with some of the past licensing deals at this stage. As you can see that we feel very, very confident of that healthy royalty rate because, as I mentioned, it's a team that we actually developed and curated over many years. So we're very confident that the team will do a great job, and we'll realize the maximum benefit of that royalty rate. But you can imagine that a typical deal on the back end in terms of things, but something that we feel really confident to realize over the course of time.

And then as far as the pipeline, number one, what we're focused on right now is the 2 programs that we have in clinical development. So navenibart in late stage, and then we're very excited about the potential for 17725, given the need in the Netherton's population. With Sandeep on board, we will be making future updates on our pipeline and our rare disease strategy, and we look forward to doing that as soon as we can.

Your next question today will come from Laura Chico with Wedbush Securities.

I guess back to ORLADEYO for one. Charlie, I'm not sure if you can share any feedback here about the impact of some competing launches right now. I guess I'm thinking about DAWNZERA, but what are the impacts you're seeing on ORLADEYO retention? Has this changed your call strategy with physicians at all? And then just a follow-up with respect to the manufacturing issue. I think I missed it, but any impacts? Or could you just expand a little bit more with implications on the pediatric launch?

Sure. Yes. Laura, as far as the competing launches, what we're seeing is what we expected, and this kind of goes back again to the forecasting we do. The recent launches, as you know, have been injectables. And so what we see is they're competing mainly with the existing market leader, TAKHZYRO. And so it's not affecting ORLADEYO. And as Babar and I both mentioned, our demand is as strong as it's ever been, and we're really pleased, not surprised, but really pleased to see that.

And so that's why we have that continued confidence about the future growth of ORLADEYO and heading to the $1 billion in peak sales. And our retention rates, you asked about that are also in line with past expectations. Patients who start on ORLADEYO, 60% of them get to a year and then very slow or very sticky after that, very strong retention after a year.

On the peds manufacturing, as we said, we're not changing our guidance. We'll have more information on the issue and timing, hopefully later this quarter. But we're not changing our guidance because the early demand has been very strong. And you may recall from past calls, in our forecast for this year, we were relatively conservative about the peds opportunity because we didn't know how quickly it would kick in. So we're very bullish on the long term, and we're on track for this year.

The next question will come from Brian Abrahams of RBC Capital Markets.

Two from me. I guess, first on the navenibart Phase 3. It sounds like enrollment has gone really well there. So I'm wondering if you could talk about any learnings there just in terms -- from the enrollment conduct, just in terms of the appetite for long-acting injectables, the types of patients who could go on this therapy commercially and the potential size of that opportunity?

And then just secondarily, following up on the manufacturing issue. Can you just give us a sense of what would need to be done to resolve this? Might this require any sort of FDA reinspection? Is there any overlap at all with this facility with regards to ORLADEYO for adults or navenibart? And could there be upside to your guidance if this resolves more quickly than expected, just given that you're seeing good launch demand already, and I know pediatric revenue was not really included all that much in your guidance?

Sure. Thanks, Brian. Yes, first of all, navenibart, we're really excited about the pace of the enrollment. And as I said in my remarks, I think it is a reflection of the appetite that both patients and physicians have for an every 3- or 6-month dosing. This is why we wanted to acquire this product in the first place because we saw that, we heard that from customers. Getting to 3- and 6-month dosing is really meaningful and transformative. And so we think there's a potential to switch a lot of patients to this. There's -- as we've described before, there's two segments in this market. There are those patients who want oral therapy and do well on it. And then there's those who are on injectable therapy and are very comfortable with that.

And the profile of navenibart is something that's really understandable to both physicians and patients. And I think that's, again, reflected in the trial enrollment. So we're excited about that future launch. As far as the manufacturing issue with ORLADEYO pellets, first of all, this is -- it's a different plant. It's a different manufacturer than capsules. So it has nothing to do with capsules. It's not an FDA issue at all. It's not a safety issue. It's just -- it's a batch problem in the specifications. We're digging in to get to the root cause so that we can manufacture consistent batches going forward. So we'll have an update on that timing when we have it. But this -- we do not expect this to be a long-term problem.

And as far as the demand for the pediatric indication so far, it has been very strong. And so if we get this issue, we get the product out there in the relatively near future, we're right on track for this year and certainly very much on track for our long-term predictions.

The next question today will come from Steve Seedhouse of Cantor.

I wanted to see if you'd be willing to frame your expectations for the Phase 3 navenibart data. Obviously, most Phase 2s, including this one in HAE smaller than the Phase 3 would be, but the attack rate reduction was pretty profound in that Phase 2.

So are you expecting like a greater than 90% attack rate reduction? Are you expecting that in both the every 3 months and the every 6 months arms? And is that what's framing pretty aggressive guidance, the $1.8 billion in 2033 sort of implies an even better launch than ORLADEYO. So I was hoping you could just frame what you're expecting from the data.

We are expecting really good results, whether it's 90%, a little over 90%, a little less, I don't think that really matters so much. What matters is the attack rate that patients get down to. And in the open-label study, as you've seen, patients in both doses are getting down to a mean attack rate of just 0.16 per month. So that's less than 2 attacks per year. And those attacks tend to be more mild than other attacks. So that is functionally attack-free for patients. And to be able to get that from 3- or 6-month dosing, we do expect there to be comparable efficacy between the 2 because remember, the 6-month dosing is twice the dose of 3 months. And so that Phase 2 ALPHA-SOLAR data is very important, really gives us confidence for the future.

The next question will come from Stacy Ku of TD Cowen.

Welcome to Sandeep. So first, just as we think about ORLADEYO, I noticed that you had talked about the continued growth in prescribers. So just curious if you could further elaborate there. That's the first question. And then a quick follow-up on the pediatric product fulfillment. It sounds like you need a quarter or 2 to kind of get more information? Or is it to resolve the fulfillment issue? So just help us understand if the base case assumption for the potential delay is potentially within the year. That's two.

And then three, as you started to dose another patients, just maybe talk a little bit more about what you're learning about the patient population, diagnosis awareness, potential size of the market and remind us your go and no-go decision on efficacy.

Great. Thanks, Stacy. Let see if I can get all these. In the growth of prescribers, you've heard us talking before in 2025, around 60 new prescribers per month, give or take. We're in that same range in Q1. So as Babar said, in year 6 to still be adding prescribers to still be getting the prescriptions at the same rate is really a reflection of this product profile and how our teams launched it.

As far as the peds pellet timing, as I said, we'll know more this quarter. Our expectation is we'll get this resolved pretty quickly. But we don't know the root cause. We haven't identified all the root cause yet. So it will just -- it will take a little bit of time. But based on what we see right now, we're on track for the year. And then as far as Netherton patients, we've done some work in the epi of this disease because that's really key. We know it's a very serious disease. We've met patients. We know how much they suffer from this. But the real key is what's the size of the market, what is the overall opportunity. And we've identified -- we have a high level of confidence that the U.S. market is 3,000-plus patients at this point. Those patients need to be correctly diagnosed. They need to be identified. But having a drug in the market is always a catalyst in rare disease for patient identification.

So the keys for efficacy, no drug in this space has to be perfect. What we'll want to see is that the patients are getting better in their overall -- the overall scales of measuring Netherton syndrome. So ichthyosis scales measured by the physicians and the patients, we'll be looking at each. We'll be looking at does the drug continue to get to the epidermis the way that we've seen in healthy volunteers. So a range of things that will help us design a pivotal program that we hope can start next year.

[Operator Instructions] Our next question today will come from Maury Raycroft of Jefferies.

Congrats on the progress. Maybe just a quick follow-up on Netherton. Can you just talk more about how much data we should expect by year-end in that data update?

Yes. Maury, we'll have up to 12 patients. That's what we're shooting for. And we want to release the data that we have altogether because it's a rare disease. That's not a huge number of patients, but we think it will give us the data we need to say, do we have a drug here. And so the package will come from that plus the 1 to 3 patients that we will have from the Part 3 of the study as well as the healthy volunteer data. So as the data comes in, we'll figure out what the package is at the end of the year, but it will be based on those roughly 12 patients.

Got it. Okay. And just for digging into prophy competition a bit more, are you hearing about more patients considering switching or switching from ORLADEYO? And even if you're not seeing an impact yet, are you getting more pressure or headwinds in capturing new patients or switches from TAKHZYRO? I guess it seems like ORLADEYO is resilient with these new launches. Are you doing anything differently?

Yes. We're really not doing anything differently. We're not -- we don't need to add to our sales force. We don't need to change our customers. We're already calling on the list of HAE prescribers and expanding that list as we've talked about. We see most of the switching, most of the market impact hitting TAKHZYRO, not ORLADEYO. Of course, patients switch from ORLADEYO all the time. 60% of them get to a year, 40% don't, and they switch to other products. And what we're seeing more is those patients when they do switch, they're more likely to switch to one of the new products, which makes a lot of sense. But the impact overall on ORLADEYO has been very minor.

The next question will come from Jon Wolleben of Citizens.

This is Catherine on for John. Thank you for the color on the ORLADEYO launch. I was wondering if you could provide a little bit more commentary on kind of ex-U.S. sales beyond Europe, if you guys -- which you guys are seeing there and kind of plans for any expansion and then your thoughts about the same for navenibart.

Sure. Thanks, Catherine. With our sale of the European business, Europe had been the large majority of our ex-U.S. sales. So ex U.S. is still an important contributor towards our peak, but we are -- the vast majority, well, over 90% of our revenue now comes from the U.S., and we expect it to be that way even as the brand grows towards $1 billion. We are though committed. We want to get our drugs to patients around the world because HAE is a global disease, and there are patients who need it. But from a revenue perspective, the great majority will be the U.S.

And I'm sorry, the question on -- you had a question on navenibart.

And do you think for navenibart, you're going to kind of see the same trend if -- kind of European market in the majority of ex U.S.

We would expect it to be largely the same as Babar was describing, our partners at Neopharmed Gentili are equally excited about this drug and having both ORLADEYO and navenibart in the portfolio, there's an important place for both of these products in all the different markets. And so we're excited about that opportunity.

The next question will come from Gavin Clark-Gartner of Evercore ISI.

This is Yesha on for Gavin. We were just wondering if on the pediatric pellet side, are you able to proactively work through payer access and reimbursement while resolving the manufacturing? Kind of also wondering how quickly you could convert the demand to paid drug when that's resolved.

Yes. Thanks for the question. Absolutely, we've been doing that already. And we'll continue to do it. The ORLADEYO pellets slot right into our existing contracts for ORLADEYO capsules. So it's really not a separate market access initiative. And so our patient services team will help patients and health care providers work through that process. And that could create patients moving more quickly to paid therapy once we do have the product supply.

And at this time, we will conclude our question-and-answer session. I'd like to turn the conference back over to Charles Gayer for any closing remarks.

Thank you. Again, as Babar and Sandeep and I have described today, 2026 is off to a really strong start for BioCryst. I'm very happy with the team we have in place here, the way that we're executing on our commercial and development programs. And I believe that the best is yet to come for BioCryst.

Thank you for your interest, and have a great day, everyone.

The conference has now concluded. We thank you for attending today's presentation, and you may now disconnect your lines.

Good day, and welcome to the BioCryst Fourth Quarter 2025 Conference Call.

[Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Nick Wilder with BioCryst. Please go ahead.

Good morning, and welcome to BioCryst's Full Year 2025 Corporate Update and Financial Results Conference Call.

Participating with me today are President and CEO, Charlie Gayer; Chief Financial Officer, Babar Ghias; and Chief Development Officer, Dr. Bill Sheridan.

A press release and slide presentation about today's news are available on our Investor Relations website. Today's call may contain forward-looking statements, including 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.

For additional information, including a detailed discussion of these risks, please refer to Slide 2 of the presentation.

In addition, today's conference call includes non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures against the most directly comparable GAAP financial measure, please refer to the earnings press release available on our Investor Relations website.

I'd now like to turn the call over to Charlie.

Thanks, Nick. This is my first earnings call as CEO of BioCryst, and I'm happy about where the company is today and even more excited about our future.

We closed 2025 with strong momentum, delivering full-year ORLADEYO revenue of $601.8 million. That was up 38% for the year and 43% when you exclude our Europe business that we sold in October.

We are also starting 2026 on a high note as we expanded our HAE portfolio with our acquisition of Astra Therapeutics last month. As I step into my new role, I want to be clear about BioCryst's strategy.

We are and will remain a profitable rare disease company committed to meeting the unmet needs of patients through commercialization, innovation, and excellence that is backed by well-understood biology and disciplined clinical development.

Where we will continue to evolve is how focused and explicit we are about capital allocation and accountability. We want to ensure that every dollar we deploy has a clear line of sight to driving long-term value creation.

Coming back to our HAE portfolio, we see a tremendous opportunity to build value by meeting the needs of a growing number of HAE patients.

We view HAE not as a winner-take-all efficacy race, but as a structurally segmented market, driven by biology, patient preference, and real-world experience.

Rather than a market that resets with every new entrant, we see a market that segments based on the needs of individual patients.

We now have a portfolio of differentiated products in ORLADEYO capsules for ages 12 and up, ORLADEYO pellets for younger kids, and a late-stage asset in Navenibart.

Each of these therapies will allow us to achieve growth and durable revenue within specific segments of the market. ORLADEYO has grown strongly in part because of its differentiation as the oral option.

But more importantly, there is a "super responder" population that can get injectable-like attack control. We saw in our pivotal trial that just over 50% of patients starting on ORLADEYO stayed on for 2 years and had a 91% reduction from baseline.

In the real world, 60% of patients stay on therapy through 12 months, and nearly 50% of all patients who have tried ORLADEYO in the U.S. over the past 5 years are still on therapy.

Most ORLADEYO super responders are unlikely to switch even if another oral option reaches the market because their needs are already met.

And now we have a new member of the ORLADEYO family. We are excited to launch ORLADEYO pellets for kids ages 2 to under 12 at the Quad AI conference this weekend.

The unmet need is significant because HAE and related attacks are underdiagnosed in younger kids, and prophylaxis usage is only half that of adults.

Availability of a safe, effective, and targeted oral prophy has the potential to change how kids with HAE grow up, and ORLADEYO is likely to be the only oral option for several years to come.

We think about Navenibart through that same lens of structural differentiation in HAE. Navenibart is not intended to replace ORLADEYO. It is intended to allow BioCryst to address patients' needs across the full spectrum of efficacy, dosing, and convenience preferences in HAE prophylaxis.

There are approximately 5,000 U.S. patients who have great attack control by injecting anywhere from twice a week to every 4 weeks. Most of them are reluctant to take a chance on oral because they are well controlled already, and the injections themselves are not a barrier to treatment. Oral is not their need.

But our research shows that many are very attracted to the idea of a simple, high-efficacy injectable dosed just 2 or 4 times per year. That is a leap patients dosing an injectable 12, 26, or even over 100 times per year are likely to make because it aligns with what they know and provides something better.

Our objective is to keep the HAE prophylaxis treatment decisions within the BioCryst portfolio. That is another way we think about long-term durability, not as defending a single product, but as owning the prophy decision framework in HAE.

We will offer three compelling options, all from a team that the HAE community knows and trusts.

Before turning to Bill, I want to briefly touch on BCX17725, our early-stage program in Netherton syndrome. This is a classic rare disease story - a devastating genetic condition that is underdiagnosed because there are no good treatment options.

We are encouraged by the results in healthy volunteers and the investigator's enthusiasm for this program. We're on a path to generate clinical data in patients by the end of the year, and we'll use that evidence plus feedback from patients and investigators to guide next steps. 

Looking ahead to 2026 and beyond, we see durable revenue growth anchored by a skilled, motivated and resilient commercialization team, meeting the needs of adults and kids who want oral HAE prophylaxis, a second molecule advancing well in late-stage development that has the potential to lead the injectable prophylaxis segment and additional rare disease optionality in our pipeline, positioning BioCryst for sustained value creation.

With that, I'll turn it over to Bill to provide more color on our pipeline.

Thank you, Charlie. I'll cover our HAE programs to start with and then provide a brief update on our Netherton syndrome program.

First, the Navenibart pivotal Phase III trial continues to recruit very well with strong enthusiasm for the study from investigators and potential trial patients. We expect to complete enrollment of the required 145 patients around the middle of 2026. 

The primary efficacy analysis of the alpha-Orbit pivotal trial will be the comparison between each navenibart dosing regimen and placebo with the time-normalized rate of investigator-confirmed HAE attacks through 6 months.

The Phase II efficacy and safety profile that we are reporting at Quad AI this weekend from the ALPHA-SOLAR Trial is excellent, with no safety signals in 29 patients through up to 24 months of dosing and a reduction from baseline in mean attack rates of 92% for every 3 months of dosing and 90% for every 6 months of dosing. 

Overall, the mean attack rate decreased from 2.23 per month at baseline to 0.16 per month during navenibart treatment. For both dose regimens, the median attack rate reduction was 97%.

These are outstanding results. These strong results illustrate the durability, consistency, and quality of treatment responses with navenibart and provide high confidence that the pivotal trial will be successful. 

We expect the pivotal trial results to confirm that navenibart every 3 months or every 6 months will set a new standard in the field and provide a very attractive choice for HAE patients seeking injectable prophylactic therapies. 

Second, we are thrilled that our application for ORLADEYO oral pellets for children aged 2 to less than 12 was approved by the FDA in December 2025.

We're now continuing with marketing authorization applications in other major regions with the goal of transforming treatment choice for patients, parents, and children with HAE around the world. 

Third, our clinical development program for our KLK5 inhibitor, Fc fusion protein BCX17725, in Netherton syndrome, has now moved into patient-focused research.

The healthy volunteer parts 1 and 2 of our Phase I trial with single and multiple ascending doses have been completed. BCX17725 was administered by subcutaneous and intravenous routes in these healthy volunteer cohorts. 

Our investigational drug was safe and well-tolerated. There were no discontinuations, no dose-related adverse findings, and no safety signals.

The top dose administered was 12 milligrams per kilogram every 2 weeks for 3 doses. And as noted in our last call, we were pleased to see evidence of the drug being distributed to the epidermis.

Drug exposure was approximately linear in proportion to dose, and the estimated half-life was about 12 to 19 days, supporting continued study of every 2-week administration schedules. 

Today, I'll provide a refresher on study design and an update on progress in the Netherton syndrome cohorts. The study design is outlined on Slide 18.

The patient cohorts in the study are open-label and designed to evaluate potential effects of the drug on clinical signs and symptoms of Netherton syndrome, as well as safety and drug exposure. 

There are 2 patient cohorts, a short-term administration cohort in Part 3 with 4 weeks of dosing and a longer-term cohort in Part 4 with 12 weeks of dosing.

Some sites were activated for Part 3 after short-term nonclinical safety studies were completed, and subsequently, were activated for Part 4, once we had longer-term nonclinical safety studies done.

We are prioritizing recruitment into Part 4 as this will give us a longer dosing experience, and we anticipate that no more than 3 patients will be entered into Part 3. 

Our clinical investigators are excited about the potential for this drug in Netherton syndrome and have identified patients who could be eligible. So, we expect to recruit up to 12 patients in Part 4 and generate results by the end of this year.

For efficacy, the primary efficacy endpoint is change from baseline in the Ichtheosis Area and Severity Index, otherwise known as the IASI score, and key secondary endpoints include the Investigator Global Assessment score and the worst itch numerical rating scale score. We will also evaluate quality of life metrics. 

We intend to select doses and endpoints for a pivotal trial based on what we see in this Phase I trial. I'll now turn the call to Babar for the financial review.

Thanks, Bill. Last year was a defining year for our company. We delivered strong top-line growth, record profitability, and reinforced our strong balance sheet position.

Those results weren't just numbers. They were proof that our strategy is working and our operating model is built for scale. 

Before I turn to financials, I want to highlight that we are providing more clarity in our financials to enable a better understanding of the strength of our core business. Please refer to today's press release for our GAAP financial metrics. 

In my remarks, I will be referring to non-GAAP figures, which are adjusted for the sale of the European ORLADEYO business, stock-based comp, workforce reduction costs, and transaction-related costs.

We believe that non-GAAP figures provide a clearer view of the business on a forward-looking basis. 

Our non-GAAP 2025 total revenue increased 45% year-on-year. Since other revenues include contributions from Rapivab, which is non-core to our business, I would draw your attention to the non-GAAP ORLADEYO revenues, which increased by approximately $169 million or 43% year-on-year. 

This was a result of phenomenal day-to-day execution by our commercial team over the course of 2025. 

By leveraging our superior real-world evidence generation capabilities, we successfully drove higher patient volume and made significant progress on paid shipments. We have already started to see the impact of the European divestiture on our operating performance in Q4. 

Our non-GAAP operating profit jumped to $214 million, an increase of 198% year-on-year, the highest ever in BioCryst's history. R&D costs came down slightly in 2025 as we progress key programs while winding down some others and realigning the team structure.

We anticipate that 2026 R&D costs will increase over 2025 as we complete the ongoing Phase III trial and BLA-enabling CMC activities for Novenibart. 

These activities, once complete, will naturally bring down development costs beyond 2026. We will remain razor-focused on maintaining R&D spending discipline and allocating capital to high ROI opportunities.

In the same spirit, we will quickly terminate programs that do not have a compelling path forward. 

Our sales and marketing expenses for the year were $144 million on a non-GAAP basis, which were primarily up due to some reallocation methodology, prelaunch costs for pediatrics, and higher specialty distribution fees and incentive comps naturally owing to the strong top-line growth. 

More importantly, as you can calculate, for every dollar invested in our sales and marketing engine, we generated an approximately 4x return on ORLADEYO net sales.

While we do anticipate some small incremental annual expense tied to top-line growth, the ROI on ORLADEYO will continue to expand as we drive the business toward its blockbuster potential. 

Looking further ahead to potential approval of Navenibart, the sales and marketing expense supporting our HAE franchise as a whole will be very stable, predictable, and carry an even greater ROI upside.

We have built one of the best rare disease commercial organizations in the industry, a highly scalable infrastructure that will enable us to deliver multiple successful launches in the years to come in HAE and beyond, whether it's another candidate from our pipeline or something that we acquire in-license. 

Driven by our strong operational results, we finished the year with a formidable liquidity position of $337.5 million in cash and investments on hand.

Concurrent with the closing of the Astria acquisition, we entered into a highly attractive $400 million financing facility with Blackstone Life Sciences, a financial partner that is aligned with our vision of growth. 

With the sustained momentum, coupled with the added benefit that now, for the next 2 years, we will be able to utilize our prior period tax NOLs, we will be in a very strong cash flow-generating position.

This will afford us optionality to evaluate a wide array of capital allocation strategies that reinforce durable value creation, be it M&A, debt paydown, or buybacks. 

Moving on to guidance. We are maintaining expectations for full year 2026 ORLADEYO revenues to be between $625 million and $645 million, which at the midpoint represents approximately 13% growth over 2025 revenues adjusted for Europe.

We expect full-year 2026 non-GAAP OpEx to be between $450 million and $470 million, which now includes expenses on Astria as previously guided. 

As Charlie emphasized, we remain very confident that ORLADEYO is on a solid footing to achieve blockbuster potential. We continue to see patient growth driven by the trends that we explained earlier, coupled with the recent pediatric approval, which will be an important component of the growth.

After turning over this profitability card in 2025, we are very committed to staying profitable and continuing to drive cash flow generation going forward. 

To summarize, as we reflect on 2025, it is clear that the strength we delivered this past year is more than a financial milestone. It's a springboard for what comes next.

We are entering 2026 with momentum, a sharpened competitive edge, and a discipline that ensures every investment we make is working towards value creation. 

Our goal is to keep advancing our pipeline through both organic innovation and selective, disciplined BD that can expand our capabilities and accelerate our impact in the rare disease space.

We are very excited to keep building the next growth phase of BioCryst, a company that not only performs quarter-to-quarter, but compounds value over the long term as we execute on that vision. Operator, we are now ready for your questions.

[Operator Instructions]

Our first question comes from Laura Chico with Wedbush Securities.

I guess I wanted to start off on Navenibart. Could you talk a little bit more about the timing for the regulatory submission by year-end '27?

Does that assume Phase III data still arriving by early '27? And I guess I just wanted to understand the steps that have to occur between top-line data and submission. 

And then, related to that, you mentioned the Quad AI late breaker. How should we think about this, I guess, in relation to ALPHA-STAR? It seems quite consistent in terms of the attack rate reductions. I'm wondering if there's incremental learning here, around maybe an attack-free period.

Thanks, Laura. Yes, we're clearly super excited about Navenibart. And yes, everything is on track for filing, such that we would be on track for filing by the end of next year. And so on track for approval by late 2028.

Bill, do you want to answer the question just about the regulatory process?

Sure. Like for other prophylactic therapies in HAE, 12 months is a chronic condition. You need 12 months of safety that will be delivered in mid-'27.

And that's really what's driving the timing of the BLA submission. And what was the final question?

And then the final question, just the data, yes, we're really excited about the data, the 92% reduction mean reduction for the 3-month dose, the 90% for the 6-month dose, just shows incredible consistency.

I think what's also really important is the mean attack rate of 0.16 across the population from their baseline. That's fewer than two attacks per year for patients plus the severity of the attacks went down as well.

So, for most of the year, patients are functionally attack-free, and that's what patients are looking for.

Our next question comes from Brian Abrahams with RBC Capital Markets.

Congrats on the continued strong progress. You talked a little bit about the ORLADEYO super responders staying on with good persistence for long periods of time.

I guess, do you have any sense of how to predict who would be a super responder? And then just maybe along those lines, I'm curious how you envision positioning Navenibart in that context in terms of whether you push patients to switch to ORLADEYO?

And then if they don't respond, Navenibart could be an option for them? Or would you be primarily positioning Navenibart for those 5,000 patients doing well on injectables who could use something that's less frequently dosed?

Then, just maybe remind us of some of the aspects of the profile for Navenibart in terms of the number of injections, anti-drug antibodies, refrigeration requirements, just anything else that needs to be done with regards to formulation ahead of commercialization.

Great. Thanks, Brian. I'll start, and then I'll have Bill answer some of those questions as well.

As far as the predictability of the super responders in ORLADEYO, there really is no way to predict other than for patients to try. So, first of all, patients have to want to be on an oral, and we know that the majority of patients actually would prefer an oral.

But as we've looked at all of our clinical data, all the different factors, age, sex, prior prophy history, weight, everything else, there is nothing that can predict who is going to respond.

As we know, HAE attacks are often driven by stress and other life factors. And so, I think our strategy is to try to get patients who are interested in oral to try.

Most of them do great. We want them to do a 3- to 6-month trial to really figure out if it's the right drug for them. And as we see, by a year, about 60% of them realize that it is the right drug for them.

As far as the Navenibart positioning versus ORLADEYO, we see the primary opportunity for Navenibart to be those 5,000 patients on injectables. Like I said in my remarks, those patients are on injectables because they're doing well, but some of them are injecting 100-plus times a year.

And so, to be able to do just 2 to 4 injections, we think, is going to be really compelling, and that's what we see in our patient research.

So ORLADEYO then is going to be for patients who want to start prophy on oral, it's going to be the known, the trusted option with many years of data and experience.

So ORLADEYO is for anyone who wants oral. Navenibart is for people who want an even better injectable positioning. And then for those patients who try ORLADEYO and it's not the drug for them, that also is an opportunity for Navenibart, all within the same BioCryst portfolio.

For Navenibart, the number of injections is really going to be very simple. So, it's going to be launched with an auto-injector and the 3-month dose after a 600-milligram loading dose, which will be 2 injections, 2 milliliter injections.

The 3-month dose is then 1 injection. The 6-month dose is 2 injections. So very simple.

And then, Bill, there was also a question just around ADAs and other things.

Yes. Before I get into that, with regard to predictability, I'll just reinforce what Charlie said. You have to try ORLADEYO to find out whether you're going to be a super responder.

And so, it benefits people in every category with HAE. So, in addition to age, sex, race, weight, prophy exposure, you can also add to that whether you have a high attack rate or a low attack rate, whether it's less or more predictable, whether you have type 1 or type 2 HAE or C1 inhibitor normal HAE, all of those categories benefit.

And we've shown that very definitively from both our clinical trials and our real-world evidence studies. So, you also asked about the maturity of the formulation development program for Navenibart. It's all done. It's very mature. CMC is in a great spot.

And then just a question about ADA?

With regard to ADA, there's no evidence of ADA impacting efficacy in the Phase II experience. And of course, with every biologic, it's part of the development program that you develop assays and look for ADAs; you always find them.

What matters is whether people continue to benefit from the drug. And so far, that is exactly the case. There's no evidence of ADA impacting either safety or efficacy.

And just to remind folks, the data being presented this weekend, these are patients on Navenibart who out to as far as 24 months with a mean of about 12 months.

So, one last thing about the injections, they don't hurt.

The next question comes from Steve Seedhouse with Cantor Fitzgerald.

This is Timurvaniov on for Steve. For Neethererton, we just wanted to clarify, are you guys going to be releasing Part 3 and 4 data at the same time?

And then also, could you talk about disease severity, the variability at baseline? Do you anticipate how difficult it would be to enroll more uniform patients?

And then what background treatments are allowed, and how patients proceed based on their disease phenotype?

Okay. I'll start with just the Part 3 and 4, and then Bill can talk about the disease severity and the patient types. Our plan is to release all the data together.

We're only going to have maybe 2 or 3 patients in Part 3. And as Bill said, we're now prepared across our sites to go into Part 4, and that 3-month dosing is what we think is really going to be meaningful.

So we don't plan to do one patient at a time. We want to release a complete data set. And then Bill, just talk about the patients.

With regard to the spectrum of severity, there is one for sure, in Netherton syndrome.

What we're finding from our research on the prevalence of disease, for example, is that, as Charlie said, it's underdiagnosed, and that's mostly because there are no approved treatments, but also because of the differences in severity from one patient to the next.

The patients we've met with this illness have obvious, really obvious disease, and they have adapted coping strategies. And that their lives have been dramatically impacted. That part of it, I'm not worried about in terms of recruiting subjects.

So the investigators that we have that are lining up their subjects are more worried about getting spots for their subjects in the trial rather than not having enough patients to put in the trial.

With regard to the eligibility, yes, we need to have evidence of illness so that we can identify whether there's a benefit from the drug. So we're doing that. We're selecting patients who have an obvious illness. And I think it will be fine. I'm not worried about that.

The next question comes from Maury Raycroft with Jeffries.

This is Amy on for Maury. Congratulations on the quarter. Just a follow-up on a previous question. Can you provide more specifics on how you would provide updates and disclosure around the Navenibart program?

And can you talk about your strategy to potentially get the FDA to accelerate the timelines?

Sure. So for Navenibart, as Bill mentioned, the enrollment is going well. And so we would probably update once we have the pivotal study fully enrolled. And then, sorry, what was the second part?

The second part is about doing our best to pull that forward as this program matures; that's obviously something we'll be focused on.

So, for example, elements of the BLA that we can start writing, we'll start to write. We won't have a crystal clear understanding of the timing of the BLA until two things happen. And one is the last patient's first visit, so that we can predict when the last visit is for 12 months later, obviously.

The next step is getting clarity with the division at a pre-BLA meeting on the total content of the BLA. And obviously, that comes later. So I think we'll be able to provide more clarity in due course.

The next question comes from Jon Wolleben with Citizens.

This is Catherine on for Jon. I just have a quick question about whether you guys are seeing any impact from the recent new entrants, including the oral acute therapies, and whether any patients are switching to ORLADEYO?

Are you seeing differences in the reasons for patients switching? I know there's not really been much of an impact on revenues, but if you expect any impact or if you're starting to see it at all? Any color on that?

Sure, Catherine. As we've said, particularly a lot last year leading up to new entrants coming in, we did not expect there to be an impact on ORLADEYO from new prophy entrants because there's a real difference between patients who want oral prophy and then patients who are more comfortable with injectables.

So we expected the injectables to be competing more with existing injectables, and that's what we're seeing. So it's not changing ORLADEYO prescribing patterns or patient patterns in general.

As far as oral on-demand, oral acute therapy, that's something we're certainly not seeing affect ORLADEYO negatively in any way. We think over time, there is a potential for a tailwind of just patients who want to be in an all oral combination, so one pill once a day to prevent attacks and then for the occasional breakthrough attacks, treat with another oral, that's a great opportunity for many patients.

But it's too early to say whether that tailwind is going to occur.

The next question comes from Serge Belanger with Needham & Company.

This is John on for Serge today. First, just on ORLADEYO. You guys took a 9% price increase in January.

Beyond that, curious which levers you'll be looking at most closely in '26, whether it be maintaining trends of new patient adds or making slight improvements on paid prescription rates, either in Medicare or commercial channels.

And then on the pellet formulation for pediatrics, curious how we should think about the pacing of patient identification and conversion throughout '26. And does your current guidance assume any material contribution from this segment this year?

Great. Thanks, John. Yes, we did take up a 9% price increase in early January, which is higher than we've done in the past. We'll net about half of that, so about 4.5%.

So that is something more because ORLADEYO was a lot lower priced than most of the other products in the market. And so this was just a little bit of a catch-up, but not something that we need that kind of pricing going forward to get to our long-term peak of $1 billion.

For this year, the KPI that is most important to us is net patient growth. And as we've said, and it's in our slides today, what we need is 150 patients net patient growth average per year for this year and 3 more years to hit $1 billion in 2029.

So we are very much within sight of getting to that $1 billion. And so that's the #1 thing. Of course, we're always working to improve the paid rate incrementally.

We made a big jump in the last year. And now it's just about making incremental improvements, and we're using our real-world evidence.

So, for example, in patients with normal C1 inhibitor, we're starting to see more plans adopt favorable coverage policies for this based on the real-world evidence that we're providing. So that's a constant process. 

Then, for the pellets, one of the things I mentioned in my remarks is that HAE is underdiagnosed in kids. We found about 500 patients in claims data for kids under age 12.

But statistically, based on the epidemiology, there should be 1,200. And one of the reasons is parents are sometimes reluctant to get their kids tested because they're frankly hoping their kids don't have HAE.

But the availability of an oral therapy, we think, and we've seen this in the early days of the HAE market, having a therapy encourages diagnosis. So there's a market growth opportunity. 

And then kids are only treated with prophy at about a 40% rate, which is half that of adults. And so there's a potential to up to double the number of kids diagnosed and up to double the treatment rate. And we think that an oral prophy is the thing to do.

Then, as far as guidance, yes, the peads launch is in our guidance for this year, but it's a really small part. We are very bullish long-term on what this indication is going to mean for kids and for revenue.

But what we don't know is how quickly that transformation is going to happen. And so we've been conservative in our thinking for this year. And then we'll see how it goes. But if it goes faster than we expect, it could be a tailwind.

[Operator Instructions]

Our next question comes from Stacy Ku with TD Cowen.

This is Vish on for Stacy. Congratulations on a great year, and I really appreciate your comments on the competitive dynamics.

We have a couple. So first, for ORLADEYO, expectations for Q1. Can you give us an idea of how the reauthorization process is progressing this year? We know you made some improvements in the process last year, which resulted in faster-than-expected reauthorizations.

So just walk us through what you're seeing and what we, and investors, should expect for Q1? 

Then, second and final for us, given the EU business sale, are you willing to split your 2026 guidance for U.S. and ex-U.S. contributions? How should we be thinking about that?

Great. Thanks, Vish. I'll take the first question and pass it over to Babar for the second question.

Every Q1 is the big reauthorization season. It's a ton of work. Our team prepares for it. They're right in the midst of that process, and our team has gotten really good at it. What you should expect for Q1, because this year, we don't have any huge tailwind like we did last year with the Medicare patients and the IRA, making it more affordable for patients.

The Medicare patients are in great shape. So we won't have that tailwind. 

So this year, you should expect revenue probably to be slightly down versus Q4 as we go through the reaff. We have to give away more free product. We have to pay a higher percentage of co-pays for the commercial patients.

And so that drops revenue even as our patient base continues to grow. So down a bit in Q1 and then it pops up again in Q2. And Babar, do you want to just talk about the U.S. versus global?

With respect to your question on the costs and contributions from Europe, if you look at our press release in the financial tables, we actually attempted to break out all that European business.

I think, as we have previously stated, that European business, while growing, was also loss-making. So you can actually see that our base business margins were incredibly strong compared to the U.S.

The U.S. business margins are incredibly strong compared to Europe. So when you look at that profitability metric that I quoted, the $214 million, that strips out all of Europe. And from the exhibits, you can glean that the base business costs are $380 million for the U.S. in 2025. 

To give you a perspective on what it looks like in 2026, and this goes back to the same cost discipline, we shut off Europe, but we added a very, very highly derisked late-stage program in Navenibart.

So our total costs are in the $450 million to $470 million range, of which the base business is actually not growing by much. The cost additions are primarily coming from adding Astria.

So that's the discipline that I talked about that we will continue to make sure that our base business costs remain low, and we continue to drive growth. I hope that answers your question.

Yes. My question was relating to the 2026 guidance, the $625 million to $645 million that we're expecting for this year. How should we think about the U.S. and ex-U.S. split there?

Yes. So a majority of that is going to be from the U.S. We have retained some markets. And as you can see, after Europe, the split is now it's a little bit over 90%. So, while we're not breaking out, the majority of that is coming from the U.S. business.

This concludes our question-and-answer session. I would like to turn the conference back over to Charlie Dyer for any closing remarks.

Thanks very much. 2026, as we've been describing, is a really big year for BioCryst. We've got continued ORLADEYO patient growth.

We're super excited about the launch of ORLADEYO for kids. A lot of important clinical trial execution for Novenibart and 17725 is going well. And I'd really like to thank all the hard-working owners at BioCryst for what they did to make 2025 a great year and what they're doing this year to deliver another year of great results.

So thanks, everyone. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Great. Welcome. Good morning, everyone. My name is Jess Fye. I'm a biotech analyst at JPMorgan. We're so glad to have you here at the 44th Annual JPMorgan Healthcare Conference. We're continuing the conference with BioCryst. And first, you're going to hear a presentation from the management team, then we're going to go into some Q&A. [Operator Instructions]

But with that, let me pass it over to the company's CEO, Charlie Gayer.

Thank you. Good morning. Thanks, Jess. Thanks to the JPMorgan team for inviting us here this year. I'm here with Bob Ghias, our CFO; and Dr. Bill Sheridan, our Chief Development Officer. And this is a really exciting time to be taking over this year as CEO of BioCryst because if you've been following BioCryst over the years, I think you'll see that it's not the same BioCryst that you've seen before. We have some really exciting things going on.

Before I get started, my team and I will be making some forward-looking statements. Those statements have risks. You can read about them on Slide 2 or our website. And then we also will be making -- using some non-GAAP financial measures in this as we talk about last year's preliminary results and guidance for this year. 2025 was a really transformative year for BioCryst. We accomplished a lot.

First and foremost, ORLADEYO growth 2025 we saw the most new patient prescriptions in the United States since the first year of the launch. This was in year 5, which you don't normally see in a rare disease launch. We made great progress on paid rate improvement in the United States for ORLADEYO, ending Q1 at 84% and the year at 81%, and this compares to our long-term goal that I'll touch on more later of 85%.

We sold our European business. The business was going great, but as one product in Europe, it was not profitable for us. And we sold it to Neopharmed Gentili for $250 million in cash upfront, and that helped us not only streamline our business, but pivot directly into a business development strategy where we turned around and got into the proposed acquisition of Astria Therapeutics that we expect to close in the next couple of weeks. And that gives us another late-stage rare disease HAE asset in Navenibart that we're really excited about.

We also achieved profitability for the first time in BioCryst history. And now that we've done that, we don't intend to go back. We expect to be profitable from here on out. And then finally, right at the end of the year in December, we got approval for ORLADEYO for kids, allowing us to bring oral preventative therapy for HAE kids down to as young as age 2, which we think will be transformative for the HAE community.

So a really big year for BioCryst. Preliminary results for the year, $601 million in ORLADEYO revenue, beating our latest guidance of $590 million to $600 million that we announced after Q3. And what's really important here for everyone to look at is the next line, $563 million in our ongoing business.

So this excludes the European business. So this is the baseline to measure our progress going forward, ended the year with great cash position, nearly $340 million. And that sets us up for 2026, where we are anticipating ORLADEYO revenue of $625 million to $645 million. Total revenue, once you include RAPIVAB of 635 to 660. And then on our base business prior to the Astria acquisition, because of the removal of our European business and other efficiencies, our base operating expenses on a non-GAAP basis will be $380 million to $390 million and then adding $70 million to $80 million once we closed the Austria deal to continue the operations there, completing the -- moving towards completion of the Navenibart clinical trial.

So a strong year for prescriptions, 1,600 patients on therapy in the U.S. despite the competition in the HAE space. So this sets us up to have 3 very strong pillars for our growth strategy. Starting with ORLADEYO, a commercial product that is on track for $1 billion at peak that we expect to hit in 2029. We're getting towards a greater than 80% contribution margin on that business. Once we add Navenibart, this is going to be north of 90% contribution margin on the commercialization. And then very importantly, a really long runway with ORLADEYO. We have composition of matter protection out to May of 2040.

So as we hit peak in 2029, we have over a decade of significant cash generation on that business. BioCryst in the past was all about our internal R&D, and we'll continue to do that in a very disciplined way with allocation of capital there. But we have some programs that we're really excited about, led by our Netherton syndrome program that I'll talk a little bit more about. This is a high need rare disease, and we have the potential to be the first truly transformative drug in a condition where there is no therapy for these patients right now.

And then external opportunities with all the cash generation from ORLADEYO, eventually from Navenibart, we will continue to look for late-stage rare disease assets, where we can plug that into our commercialization engine and really leverage the infrastructure that we built and the skills that we have in commercialization to drive future value in rare disease.

So again, this starts with ORLADEYO, a molecule that we developed ourselves was first approved in 2020 is now entering its sixth year of launch and still growing. As you can see from the right side of the slide, about 50% of the patients who have tried ORLADEYO in the U.S. are still on therapy after 5 years, and the growth continues. And the reason they're still on therapy is because ORLADEYO is a drug that either works fantastically well for you or it doesn't, in which case you move on. And we knew this going back to our Phase III pivotal trial, APeX-2, when we looked at the long-term 2-year data from this trial. And the patients who stayed on ORLADEYO 150 milligrams had a 91% reduction in attacks versus their baseline. And so in the real world, that's what physicians and patients are discovering is you should expect great efficacy from ORLADEYO. And if you don't get it, that's okay. You have many other options that you can try. And what this translates to is when a patient starts, patients start on ORLADEYO, 60% of them make it to a year. And then after a year because they're doing well, very few drop off therapy.

So ORLADEYO is not only the most differentiated product as the only oral prophylaxis product in the market. It's also highly competitive on an efficacy perspective. And so what this sets up for the next several years in ORLADEYO is we believe 15% roughly year-over-year CAGR in revenue growth out to 2029, where we expect to hit $1 billion. And if you look at the chart on the right, this is very achievable. All we need to do to get -- we've got 1,600 -- a little more than 1,600 patients today, at net average of 150 net patients per year over 4 years, gets us to where in the United States gets us to where we need to go.

A little bit of improvement in our paid rate going from 81% at the end of last year to 85%, and we continue to make progress year-over-year in this, modest price increases and then contribution from our businesses in Japan, Canada, and the rest of the world. This is a very achievable path to $1 billion. And then that sets up what we expect to be coming in a couple of weeks with the acquisition of Astria. We're really pleased with this deal. We were purchasing Astria for $700 million in total enterprise value. And it starts with the strategic fit. We have shown that we're really good at commercializing differentiated products in the HAE space. And this Navenibart fits right into that strategy, right into our core area of expertise. Navenibart is a very differentiated product. It has the potential to be in every 3 to 6-month injectable dose. And when patients and doctors hear about that 3 to 6-month profile, they get excited. This is something that makes them think about switching from existing injectable products. And it's very simple for them to understand because kallikrein inhibition is a mechanism that they already know well.

So you put these 2 things together in 1 team. As ORLADEYO hits peak, we won't need to spend as much marketing dollars in ORLADEYO. But it's the exact same team that we'll be commercializing. So we don't need more people to commercialize Navenibart. And so that just strengthens our cash flow position and sets up the opportunity to do more in the rare disease space.

So what's the opportunity for these 2 products, where you've got the only oral prophy product right now in ORLADEYO and then you're adding in a differentiated injectable product. What we see is that the U.S. HAE population on prophylaxis has been growing steadily at about 3% to 5% a year, and we expect that to continue as more patients are diagnosed. And as more patients continue to move over to prophylaxis.

So ORLADEYO has at least another 2 years where it is the only oral prophy product in the market. So we'll continue to grow with ORLADEYO. And then as I explained patients are already doing well on one pill once a day, why would they switch to anything else. Then from an injectable population, there's about 5,000 patients and growing who are on some type of injectable prophy and Navenibart comes in there with the most patient-friendly -- every 3- to 6-month dosing profile. And so the majority of the opportunity there is to switch patients from other prophy.

So 2 very complementary prophylaxis products that meet the needs of the market. And we're going to do this with a team that has great rare disease commercialization experience has been doing it in a very dedicated and differentiated way using a sole-source specialty pharmacy that allows us to generate evidence, evidence that we use to help our commercialization efforts on a day-to-day basis and then evidence that helps us build more into the clinical literature and teaches physicians, in this case, about ORLADEYO in the future about Navenibart and in the future about other products, perhaps like 17725.

So as I said, Navenibart is highly differentiated, early proof-of-concept data from Phase Ib shows that it's got a very competitive efficacy profile regardless of whether it's the 3 or the 6-month dosing. Very importantly, it's a small injection, 3 months will be a 2-milliliter injection every 6 months, we'll be double that in an auto injectors. And in the Phase Ib, no injection site pain, which is something that a lot of patients experience on the market leader today, lanadelumab. And so as I mentioned, you put these 2 together, we're addressing both segments of the market. There is a growing preference for oral prophylaxis and we're addressing that with ORLADEYO.

In fact, we're building that preference. But for those patients already doing well on an injectable, they're sometimes reluctance to switch to anything else unless the benefit is very clear to them. And that's where we think that Navenibart is going to step in and be very clear, you can go from every 2 weeks or every 4 weeks to every 3 months or every 6 months, and that's going to be the value proposition without giving up any efficacy.

So you put these 2 products together in 1 portfolio, and this is what it could look like. You've got ORLADEYO growing at mid-teens revenue CAGR through 2029. And hitting peak in 2029 is we do expect additional competition. But that's right when we'll have the first full year of Navenibart revenue kicking in. So $1 billion late this decade and then Navenibart keeps us growing at double digits, mid-double -- or mid-teens revenue into the 2030s.

And all of this is on a very steady base of operating expense. So we expect our OpEx over this time to grow at about 4% or 5%, mid-single digits. And what do you get for that? You get the team that's commercializing both of these products. Again, we don't need to grow it because we have the expertise. We have enough sales reps. We have the marketers. We have the marketing dollars. We just need to redeploy the focus between ORLADEYO and Navenibart. You get the G&A function that supports all of this. And you get the finance team, you get the HR team, pharmacovigilance, all of that is built into this. And then you also get our R&D. And so drugs like 17725, the cost of developing that and taking it forward is included in this chart. What is not included is the potential revenue from something like 17725. And so that becomes upside.

So we're going to be really disciplined on our operating expenses, growing revenue from HAE and beyond. And then it gives us the ability with -- we see $1 billion in cash in 2029 to redeploy and look for other late-stage assets that our team can commercialize.

So let's turn quickly to our pipeline. And the real thing to focus on here is BCX-17725 for Netherton syndrome. It's about to enter initial proof of concept trial in Netherton patients. We have other undisclosed targets that we're excited about, and we hope to bring forward in the future. But right now, let's focus on 17725.

Netherton syndrome is a really horrible disease. You can see from the picture of the kid on this page. It's a genetic disorder that causes uncontrolled skin turnover and not only does that obviously affect the skin, but for patients, this leads to increased infections, increase of atopic conditions, asthma, food allergies. What we hear from patients is patients with Netherton spend their whole day thinking about how they're going to deal with this disease.

And there are no approved therapies for this condition right now. We've done initial work showing that there are about 1,600 patients looking in claims data in the U.S. I'll tell you about some additional work that we're doing that suggests it could be even larger. So it's a classic rare disease, no treatments available right now. And our therapy is going to be replacing the missing protein and controlling KLK5 that is the uncontrolled bad actor in this case. And we have the potential to be the first targeted therapy in the first systemic targeted therapy.

So as I'm sure everyone is familiar in rare disease, you often see this where the prevalence, the incidence goes up once there are therapies and it makes sense because doctors don't tend to look for things that they can't treat. And we think -- we've seen this in HAE. We have people on our team who launched Cinryze back in the day, and they thought there were 2,000 or 3,000 HAE patients. Now we know there are over 10,000 in the U.S. And we think the same thing will happen in Nethertons. We're in the middle of doing -- we do a lot of really deep analytical work. That's a part of our commercial strategy and success. And we're doing that work in Nethertons, and we're using natural language processing models right now digging into EMR data, and it's suggesting that the population could be 3,000-plus in the U.S. alone for this high need disease.

So more to come on that, but we're excited about the opportunity. 17725 inhibits KLK5, which, again, because of the natural genetic defect the control of KLK5 is what's missing. That is at the top of a cascade of proteases and ultimately, cytokines that cause the skin to turnover, cause patients to have itch, cause redness and many other problems. We believe that inhibiting KLK5 really significantly, and that's what 17725 does can control this cascade and has the potential to restore normal skin turnover and all everything downstream from there.

So where are we in this program right now? We're through healthy volunteers. And our healthy volunteer work showed 2 important things. Number one, this drug appears to be safe in multi doses. So that's super important. And then number two, you can see from this slide, the drug is getting to the epidermis. That's where it needs to go. So you look at the right side here, we used a phosphorescence tag on the antibody. And you can see not only does 17725 flood the dermis, which is great, but it gets into that outer layer, which is the epidermis. That's where KLK5 acts. That's where the drug needs to be.

So this doesn't prove everything, but it was an important derisking of the program, and we'll see how the drug behaves in patients. So we're done with -- we've got a Phase I study that studied healthy volunteers and now it's moving into patients. We're finished with a healthy volunteers. We're moving into both Parts 3 and 4 of this Part 3 is expected to be 1 to 3 patients and it's a 1-month dosing period, 3 doses over 1 month. And then Part 4 is dosing for 3 months, every 2 weeks in up to a dozen patients. That's what you really want to focus on.

We are highly confident, by the end of this year, we will have up to about a dozen patients who have gone through 3 months with follow-up, and we'll be looking to see not only the safety and exposure. Is it getting to the skin, but importantly, is it changing the clinical picture? Is it improving skin turnover? Is itch going away for patients. And that's the information we're looking for to design our Phase III program, go to the regulators next year and begin a pivotal study for this high need disease.

So upcoming milestones, key milestones in about 2 weeks from today, we should be through the Astria acquisition. All that remains is a shareholder vote from the Astria shareholders. Then by the end of next year, and it could be sooner, depending on the size of effect that we see, 17725 proof-of-concept in Nethertons. And then early next year, Netherton's top line -- sorry, Navenibart topline result for HAE, which is obviously a critical stage towards moving towards filing and approval. This is on top of quarterly revenue growth in both ages 12 and up and the pediatric indication and more and more cash generation for the company.

So again, I'm excited for what we have going on at BioCryst right now. It's going to be a big year, and we have a lot of opportunity in front of us.

So with that, I will turn it over to Jess and...

Great. Thank you. And as a reminder, if you have a question in the room, just raise your hand. And if you have a question on the webcast, you can send me them on the iPad here.

So great, so we've had some competitive entrants in HAE prophylaxis recently. Can you just expand a little bit on how you've seen that landscape evolve over the past year and just kind of what you're seeing with the new entrants.

Sure. Yes, HAE for a rare disease is very competitive. I think there's 10 or 11 products approved right now, which is fantastic for patients. The most recent approvals have been an oral acute therapy and then 2 injectable prophy therapies. And so as I was describing, we have the most differentiated prophy therapy as the only oral prophy on the market. And for many patients, that's what they're looking for. And so that's a segment that we really own.

Overall, the market keeps going more and more towards preventing attacks with prophylaxis, which is the right thing to do. So it's probably around 80% of patients in the U.S. are on prophylaxis, and we see that continuing to grow. And then having the opportunity to treat the occasional breakthrough attack with an oral acute therapy is a great opportunity for patients. So we see that as a potential benefit for patients if they can be on ORLADEYO plus an oral acute is great. But the oral -- or sorry, the injectable prophy products moving from every 2 weeks to once a month is a nice to have for patients, but it's not changing the trajectory for ORLADEYO because of our differentiation. So we've seen all through 2025, even as new -- new products came on, continued strong demand for ORLADEYO.

And with the European ORLADEYO rights divested, can you also just talk through in a little more detail how ORLADEYO still gets to $1 billion peak sales without that region. So like how much of that growth is coming from market expansion versus market share?

Sure. The -- several years ago, we saw -- we announced that we saw ORLADEYO getting to $1 billion. That was with a 12 and up indication. As Jeff was suggesting, that also included our European business. So when we sold off our European business, we looked at our current U.S. business.

We also looked at the upcoming opportunity in treating kids down to age 2. And based on the pace of growth in the U.S. the addition of the pediatric population, which is both underdiagnosed and undertreated from a prophy standpoint and then modest growth from other regions. We see ourselves still getting to $1 billion because of that product differentiation, capsules for 12 and up, oral pellets for kids in a market where they only have injectable opportunities right now.

You put all that together. So we'll get most of that $1 billion in the U.S. and then contributions from Japan, Canada and other regions.

Yes, the question was about Avoralstat, which is I didn't mention this, but it's on our pipeline slide, which is Avoralstat is being developed for diabetic macular edema. We're in the middle of a Phase I proof-of-concept study in DME patients. And we decided in the second half of last year, to finish this Phase I study, but that this is not a rare disease.

So this is not core to our strategy. So what we're going to do is finish that program, and we're going to be looking for partners to spin it out to out-license it. We think that having a kallikrein inhibitor dosed via suprachoroidal injection. So at the back of the eye has the potential to be there for many months to inhibit kallikrein is a great opportunity for patients. But we're going to finish that Phase I, see what we have. We're making good progress on it and then see if we can out-license that this year.

So for the ORLADEYO business, you talked about by 2029 when you reach a steady state, the franchise just might not require the same level of resourcing. So how should investors think about the SG&A associated with ORLADEYO as it matures? And how should we think about kind of terminal operating margins with that franchise?

Sure. Maybe I'll start and then Babar can add some comments to that, which is we have a small sales force. We have 40 rare disease specialists covering the market. And we think they cover the HAE space better than any other team. They are super excited about launching Navenibart, and they can do ORLADEYO and Navenibart at the same time.

As ORLADEYO reaches peak the market is going to be very familiar with it. We don't need to spend as much promoting that. And so maybe that takes a second position to Navenibart. We devote more of our efforts to Navenibart our marketing dollars to Navenibart.

So basically, same pool of money, same great team just shifting the priorities around, so very similar OpEx.

Babar, is there anything you want to add?

Yes. And I think we disclosed this in our quarterly reports that at this point in time, we are not spending more dollars to buy revenues. The only expansion that you see in our S&M expenses primarily, let's say, you're selling more, you're going to pay the specialty pharmacy fees more.

So at this point in time, I think the expense structure for the base business is steady state. But even further, I think the overall business is reaching a point of equilibrium in the sense that as programs advance or basically, we are also very disciplined in terms of cutting programs that do not make the mark. We expect that the R&D expenses to remain fairly standard and going forward as well.

And then I guess just bigger picture, you've laid out like very detailed long-term projections. What's the rationale behind kind of like why you're providing such kind of specific long-term guidance for folks?

We -- we have -- let me start with the revenue and then we can talk about the OpEx, too. So we have launch to date, a big part of our success has been our ability to do deep market research and really predict what patients and doctors want. And we do very detailed models that predicts the future in this space. It's been very predictive of where ORLADEYO has gone launched to date.

Basically, 5, 6 years ago, we predicted where we are -- where we were in 2025. We're doing the same thing for Navenibart. So we want to help investors see what we see from that standpoint. And then from the operating expense, we really want to show how disciplined we are around our capital allocation right now and how we're balancing between those 3 priorities of driving the commercial growth, devoting what we should devote but not going overboard on the internal R&D and then allowing for cash generation for business development as the opportunities come up.

So then maybe related to kind of the R&D outlook, if the Navenibart Phase III is going to be kind of ongoing in '26 and wrapping up the data in '27. What's the right way to think about kind of the near medium-term R&D trajectory?

You want to handle that one, Babar?

Yes. So I think on the Navenibart side, there is going to be an incredible amount of synergies from the Astria acquisition since we are not going to have the G&A overhead. So we are guiding to this morning that upon closing of the transaction, we'll have about $70 million to $80 million of additional burn. But that will essentially go down because that trial is in its Phase III enrollment.

So we are preparing for -- we're doing the enrollment, we're preparing for pivotal CMC activities. So going forward, that expense will come down. But naturally, if 17725 is successful, then essentially, we'll see some pivotal trial. But having said that, and this goes back to the point in terms of strategy, any rare disease trial that you're looking at, you're not looking at several hundred million dollars of expense. So year-on-year, you'll see some expenses go up. Others go down as trials complete, but we're not looking at several hundred million dollars of R&D expense by nature of our business in terms of focus on rare diseases.

So you talked about the [indiscernible] trial, and I think you talked about Part 4 data by the end of '26. What about Part 3? Do we get that kind of in between there?

So I'll start on that and then Bill can add some color. Both Part II and Part 4 are open label. Part 3 is only 3 doses over a month. Part 4 is 6 doses over 3 months and then follow up. And the other key thing here is that Part 3 is not a gate to part for. It's really about when the sites are -- have the IRBs approved to go into Part 4. And so some patients will go straight into Part 4, and we may just have a couple of patients in Part 3.

So what we're looking for is when the outcomes in patients are really significant. When we see clear signs of clinical improvement that allow us to declare that we have a drug that can move on to a Phase III pivotal trial.

Bill, anything else to add?

Sure. What matters for us is seeing a big treatment effect in enough patients to give us the confidence to invest in a pivotal study. So 12 weeks of opportunity of dosing and with follow-up gives us more of an opportunity to see that. We're measuring, as you would expect, symptoms of pain, itch, redness, well-being, general health and if the drug gets into the skin in sufficient quantity, I'm confident it will work.

We've got the right target. So a very exciting program. I can't wait to see the data. But you should focus on having sufficient numbers of patients through 12 weeks of dosing to give a realistic estimate of treatment effect size.

And the one thing I'd add is we're seeing a lot of enthusiasm from -- there are not that many KOLs yet who focus on this disease, but the global KOLs, the U.S., Europe, Australia who see this disease are very enthusiastic about this, the profile of this product and helping us complete this trial.

And you talked about a big treatment effect and then you kind of outlined a number of clinical metrics. So have we moved beyond looking at biomarkers and now that we're in patients?

This disease pathology is all -- is starting the epidermis. So there isn't really a plasma biomarker of use for estimating pharmacodynamic effect like there would be in a disease like HAE, where you could use kallikrein inhibition as a tool. So this area lacks that. So we really have to focus on clinical outcomes. So it's all about the clinical outcomes here.

And then is the idea that you would go straight into some kind of pivotal study? Or is there kind of like a Phase II step in between?

The ideal progression here is to see dramatic improvement in the skin and go straight into a pivotal. And given that there are no approved therapies, we're anticipating regulatory engagement, both with the FDA and with international regulators to enable that to happen once we have the data from this study.

Can you give us a bit of a framework maybe some epidemiology stats on just how to think about the opportunity in Netherton syndrome?

Sure, there's first caution, I would say is don't just look at the literature because like any really rare disease at this stage in the game, you look at the literature, you'll see numbers of case reports. And so what we've been doing is going deeper than that. There's no ICD-10 code for this disease.

So we've done some work in a year or so ago looking at mentions of bamboo hair in claims data. Bamboo hair is a feature that kind of is what it sounds like. You look at hair, particularly under a microscope. It looks like bamboo that is distinct to Netherton patients. And we found about 1,600 U.S. patients with mentions of bamboo hair.

But we weren't satisfied with just that. So we're going deeper. As I mentioned, we're looking at EMR. We're using NLM technology to look at EMR data, to look at other features of the disease, other diagnosis patterns. And we think that this is now likely a 3,000-patient plus market. At some point in the future, there'll probably be an ICD-10 code. But right now, it's really critical for us to do everything we can to determine the size, understand the size of this market, and we think it's a lot bigger than what you'll see in the literature.

And it sounds like highly symptomatic. So is this like a difficult diagnosis? Or are these patients -- I would think they would become well identified. How do we kind of reconcile that with the idea that they may be underdiagnosed.

The simple story is what I said earlier, which is doctors don't look for things that they can't solve. And there's no diagnosis code, so they can't peg it there. Netherton syndrome is particularly acute and life-threatening for kids, for infants because at young ages, children's skin turns over a lot faster.

Kids are growing and maintaining a skin barriers even that much more important. So it can lead to more diagnosis there, but some of these kids are missed. Then as patients get older, it becomes more of the chronic stage, which is still a really difficult disease. But as I mentioned, patients spend their whole day operating around this disease. They typically apply creams, over-the-counter creams across their whole body multiple times a day. They have other special things that they learn to deal with. But what we hear from patients is because their doctors have nothing to offer them, they get frustrated, and they stop going to ask anymore.

So they kind of disappear into the woodwork of the health care system. And we think that having a targeted therapy is going to help them come back out. And we've seen this. We heard the story in HAE, where patients would get misdiagnosed. They kind of bumble along on their own for the years, but now that there's therapy. They're with good doctors who know what they're doing, and it's completely changed in the last 15, 20 years.

So coming back around to Avoralstat for DME, now that that's kind of in the bucket of kind of potential licensing opportunity, should we expect to hear about the initial data or only kind of when that deal materializes?

Most likely when a deal materializes. Let me tell you where we are right now. We've got -- in the Phase I study, we've got 3 cohorts. We've completed the first cohort at a 100-microgram dose. That was by design, is really a safety dose. So we do not expect to see much efficacy from that.

The next cohort goes to 250 micrograms and the third cohort goes to 500 micrograms. We just opened the IND in the U.S. So we're starting to enroll U.S. studies. Previously, it was just in Australia. And so we're confident that towards the middle of this year, we'll have a lot more data there. But you're likely to see the data more when we announce a deal.

Great. So we're about out of time, so we'll leave it there. Thank you.

Great. Thanks, Jess.

Hi, everyone. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. It's with great pleasure that I'd like to welcome the BioCryst's management team. We've got Jon Stonehouse, CEO; Charles Gayer, Chief Commercial Officer; and Babar Ghias, the CFO. Thanks so much for joining us today.

Yes. Thanks for having us.

And we're going to do a fireside chat format. So for those who are new to the story, if you can give a brief intro to BioCryst.

Sure. So Maury, first off, thanks for inviting us to this year's conference. We're all going to be making forward-looking statements. Those statements have risks. Risk factors can be found in our most recent filings.

BioCryst is a pretty interesting company. I've been in it for almost 19 years. And today, BioCryst is a company with revenue from ORLADEYO, somewhere between $590 million and $600 million and growing to a peak of $1 billion. So really good trajectory of growth and patent protection out to 2040. So that's the growth engine.

Next is we've got a pipeline of internal stuff, the one that's in the clinic -- 2 in the clinic, [ 17725 ] for Netherton and then avoralstat for DME.

And then third, we're in a financial situation where we were able to do a proposed acquisition with Astria, and that's in the process of going through the closing process. And so now we have a late-stage asset with navenibart and in a spot where we know the space very well with HAE. And so we're really excited.

So -- and we'll continue to be profitable. This is our first year of profitability, a year ahead of schedule when we first said we would move towards profitability, and we'll continue that even with the absorption of Astria. So really exciting story.

Got it. Yes, it's a great intro. And I wanted to ask about ORLADEYO. It's pretty soon since you just had your earnings, but maybe you can comment on how fourth quarter sales are looking and how you're setting expectations for the quarter and drivers that could lead to beat or surprise?

Yes, Maury, maybe I'll reiterate something that we said at the Q3 earnings call, which is in the third quarter, we had -- despite the launch of 3 new competitors in the space over the summer, we actually had slightly more new patient starts this year than we did in Q3 of last year.

So this is what we expected because ORLADEYO is the most differentiated drug, it's the only oral drug in the market. And what the prescribers and patients are showing is the demand is still there in our fifth year of launch. And so we expect that same consistent demand and consistent patient retention. And we'll -- so we'll have continued steady growth throughout the fourth quarter, getting to what Jon said, $590 million to $600 million for the year.

Got it. Okay. And maybe just talk about the EU divestiture and just the rationale and the impact there as well.

Yes. The rationale is we built a really strong EU business, but it was generally loss-making or breakeven. So we were generating about $50 million in 12-month -- trailing 12-month revenue, but the costs were also about $50 million. And our new partners, Neopharmed Gentili, came to us with a really attractive offer with about a 5x multiple on the revenue.

So for $250 million, they wanted to buy the product in Europe, but also very importantly, the team that could be the base of a new rare disease consolidator strategy for them. So it really fit, and then it allowed us to clean up our balance sheet and contributed directly into the proposed acquisition of Astria.

Got it. Okay. That makes sense. And I guess did you know about the Astria acquisition before the divestiture? I guess, was that...

No, the divestiture started last year at some point. The Astria thing was more recent. But what it allowed us to do, it gave us different levers such as retiring our existing debt, which we've done. So it just made our position stronger.

But the ability to be able to pull off that sale put us in the acquisitive mode for sure.

Right. Yes. Okay. Makes sense. And you're maintaining 2029 potential $1 billion peak sales guidance for ORLADEYO, which now includes pediatric sales and excludes EU sales. You mentioned that as the [ prophy ] market continues to evolve that you're maintaining steady growth there with commercials. But just how do you see the drivers behind that $1 billion peak sales changing over time or staying the same over time?

Yes. We -- it was a few years ago that we first said that we saw ORLADEYO as reaching $1 billion. And at the time, we said that would be $800 million from U.S. revenues for the capsules, the age 12 and up indication and then $200 million ex U.S., with about half of that being Europe, half being everywhere else.

So even with taking out the $100 million from Europe, as you said, the reason we think we're still at $1 billion in 2029 is the U.S. business has grown more strongly than we anticipated when we set $1 billion a few years ago. And then we're adding in the pediatric indication, the -- what we hope to be aged 2 to under 12, with a PDUFA date on December 12, so right around the corner. And the combination of those two things puts us on a path to $1 billion in 2029.

Got it. Okay. And kind of another question just around the evolving HAE landscape. Just, I guess, what are the key leading indicators that you're tracking to give you confidence around the continued cadence of new patients going on to drug?

We do a lot of market research. That's been one of the keys to our success in the launch so far because we really want to understand what the future looks like and what we've done has been very predictive of where we've gone.

So what we see again is with ORLADEYO being the only oral on the market right now, the only oral prophy on the market, the forward-looking intent to prescribe from physicians is just as strong as it's ever been. The desire from patients to be on an oral therapy has actually increased over the last few years.

And so there's still a lot of opportunity. At this point, a little over 3,000 U.S. patients have tried ORLADEYO. But that means that there's up to 8,000 left who have not. So there's a lot of opportunity in front of us.

Yes. And I think a really important point for investors to understand is one, the market has changed dramatically in the last decade or so where everybody is controlled now, right? Everybody -- most -- as Charlie has said in the past, 80% of the market is prophy. Most people are on prophylactic therapy, and they're under control.

So they only see their doctor maybe once or twice a year. And so the frequency that they get back is very limited. And so that affects the trajectory of growth of any new entrant. That's point number one.

Point number two is ORLADEYO really works in the patients that -- as well as an injectable therapy when it works. And so people aren't sacrificing efficacy or willing to not be controlled because they get to take a capsule a day, they'll go on to something else. They'll go back to what they were on before or they'll go on to something else.

And so with that, if you don't have something that works as well as ORLADEYO in these patients that's better than a 1 pill once a day, why on God's earth would you switch? And that is the fundamental premise of why the market share is so sticky.

Yes. Makes sense. Okay. And for those 8,000 patients that haven't tried ORLADEYO, I guess, what's the strategy there to eventually get to those patients?

The main strategy -- well, two things. One, we -- our team has been excellent at reaching prescribers. So we're constantly expanding our prescriber base. We had 63 new prescribers in the third quarter. And the way I like to say it is if it looks like you might have an HAE patient, we will find you. So it's getting -- it's going beyond the KOLs and getting into allergist immunologists mainly who might not even realize that they have an HAE patient. And so we're really good at finding that.

And then the other piece is we continue to generate more evidence in the real world on ORLADEYO. And so what this does is it builds the story around the efficacy.

So for example, earlier this year, we released data in over 350 patients with HAE with normal C1 inhibitor. And nobody has ever released this kind of data before, and it opened up or further strengthened a segment that's now about 30% of the patients on ORLADEYO and giving prescribers, patients and importantly, payers more confidence in ORLADEYO that it should be used and it should be reimbursed for those patients with normal C1 inhibitor.

Got it. Okay. Yes. All helpful. And let's shift gears to the Astria acquisition. Maybe just checking if there's any update on the closing of the deal, if you've gotten FTC clearance, any update there?

Everything is on track. So for Q1 closing, and you'll see updates in the coming weeks in terms of proxy statements and all that, but it's on track for Q1.

Got it. Okay. And maybe talk a little bit about the reason why you're doing this acquisition and bringing in this injectable into an HAE franchise that's been focused on an oral prophy. And so yes, maybe just kind of talk about the purpose of it.

Well, Jon talked upfront about our financial position and our ability to now expand our portfolio. Right now, we have one product on the market. So the question is always what's next. And what's next we said needed to be something that is later stage, it needs to be something that has very low risk and make really clear strategic sense. And I think with Astria and Navenibart, we really nail all three of those points.

Astria is a company we've been following with great interest. We actually started talking to them a few years ago because when we first saw what they had and some of their early data, we thought this is going to work.

And then when we talked to physicians, do research with physicians and patients, they see the profile of every 3 or every 6-month kallikrein inhibitor. And what comes out of their mouth is, "Oh, yes, this looks like TAKHZYRO," the market leader, "but I can do it every 3 to 6 months and without injection site pain."

So it's going to be a very differentiated product. And so we think it complements what we already have in the oral space with ORLADEYO.

Got it. And what's the roadmap to capture the approximate 5,000-plus injectable experience patients with Navenibart? And what parts of the launch strategy will be similar or different versus your ORLADEYO launch? And which type of patients are you going to target?

One of the things that's going to be very different is that we're going to be able to launch Navenibart with basically a running start because we've got our commercial model built, we've got our team in the field, the relationships are there.

I'll give another example, which is by the time Navenibart launches, we'll probably have about 3,000 U.S. patients who've tried ORLADEYO, turned out not to be the drug for them, but we have approval, we have permission to market to them. And so we're building a base of potential future customers for Navenibart. Most of these patients now have moved on. They're on TAKHZYRO or ANDEMBRY or another injectable product.

But back to my point of they -- when they see this profile of Navenibart, this is something that we think is really going to motivate switch. And so we know the customers. We've got the data. We've got levers to pull on the marketing front and the sales front. And so it gives us opportunities that we had to build with ORLADEYO, we're going to have that right from the start.

Yes. And I think one other thing is there's no "winner take all" in this market. And so there'll still be over 5,000 patients on injectable prophy therapy, which in the turn of the decade, which is a huge opportunity for Navenibart. And we kind of get to the plateau of ORLADEYO. So we'll continue to have that beautiful revenue growth of approximately 15% compound annual revenue growth into the next decade.

Got it. And which types of patients are going to target initially, this launch?

I think the biggest opportunity is those patients who will be on TAKHZYRO. It's the market leader today, we actually think it will be -- it's a really good drug, and patients are going to stick with it, many of them. But the ability to have a drug that they can very clearly understand, but offers them something better for them in terms of the dosing while still being very high efficacy makes that a really important target segment.

Great. And just thinking about allocating resources internally, how do you make those decisions on what you want to allocate towards ORLADEYO versus Navenibart so there's no conflict and you can maximize value?

Well, first of all, it's a near-perfect synergy from a cost perspective because we don't need more salespeople, we don't need significantly more marketing dollars. So if you think about it, in 2029, as Jon said, ORLADEYO is going to be reaching a peak. There are going to be over 2,000 patients who are doing really well on one pill once a day, and they're likely to stick with it.

We may not be attracting as many new patients at that point, but we won't need as many resources to maintain the business that we have. So the sales force, while they're now 100% focused on ORLADEYO, maybe in the future, it's 80% on Navenibart and 20% maintaining on ORLADEYO. It's all the same customer base. So it's -- we're really enthusiastic about it.

Got it. And for the Navenibart clinical development plan, is there anything that you would do differently with that? Is there a way that you can potentially accelerate it?

I mean we've been really impressed with the Astria team and what they've done so far and the -- where they should be, they've guided to Q1 of 2027 for top line pivotal data.

What we'll do, first of all, is once the acquisition closes; is do no harm to that. So we want to make sure that we continue to do the great things that they're doing. But then we have a very experienced team as well, who's done this before with ORLADEYO. So we will try to -- anything we can do to help without getting in the way will be part of our strategy.

The synergy story here is that you don't have to build a new sales force and all the supporting G&A to launch Navenibart, which is what Astria would have had to do on their own. So that's -- we have that. So that -- I mean, that is massively synergistic.

Yes. Makes sense. And for that Phase III study, so they're testing Q3 and Q6 dosing. Do they have to hit [indiscernible] on both? How do you view that just the benefits of every 3 months or every 6 months?

Yes, they would -- first of all, we have a lot of confidence that both doses will hit statistical significance, not relative to each other, but versus placebo. That's what you need to get into the label. So we have high confidence that it will be a product with the option of 3- and 6-month dosing. And that flexibility to have one or the other is what patients and doctors want.

Right. Okay. And anything more you could say on just expected timing for the regulatory path to get the drug approved?

I mean I'll just say again, what Astria has said is data -- top line data Q1 of 2027. And then if you look at the analogs from ORLADEYO, other prophy products that have been approved in the last several years, it's usually 18 to 24 months from top line data to launch, depending on how a company puts together the package. We'll look to do that as quickly as possible. So launch in the latter part of 2028.

Got it. Okay. And then with the EU divestiture, now you're going to have a new drug that could potentially have value potential in the EU. So what are your plans there?

Well, we built a great team. They were super successful. We will not build again in Europe. So we would look to partner it. And that's another thing as we acquire the company and the program, it could be another thing where we out-license that. There'll be a lot of interested partner opportunities in Europe.

Got it. And how do you view evolving competition as it relates to this asset?

So we view this one as the really differentiated injectable product. I'll go back to that point of customers describing this as it's like TAKHZYRO but longer acting. So it's really easy for patients and doctors to understand what Navenibart is.

There are some other drugs coming in the future that could be very effective drugs, but may not be as easy for doctors to explain to their patients. And so we think that both the timing of the Navenibart launch, the fact that our team will be doing it and our skill in HAE and then the fact that the story is very easy for customers to understand and very meaningful really sets Navenibart potentially apart from anything else that's coming in the future.

Did you guys do a lot of market research on just how many patients would switch from TAKHZYRO to Navenibart and...

Yes. We definitely do a lot of market -- I mean we do. And again, I'll say they see this as a very attractive product. It's hard to get HAE patients to switch because it's really got to be a meaningful thing to them that "If I switch, what do I get? Am I confident that this drug is going to work as well for me? And then what's going to be the burden? What is going to be my support?"

And I think the HAE community has seen that the BioCryst patient support program is second to none. They -- we expect this to be a very highly effective drug. And then like I said, it's easy for them to understand. So I think it checks all the boxes.

Got it. Anything else you could say on just what you would do to get those patients to switch from TAKHZYRO?

Why don't we save that conversation for -- meeting in a couple of years? But look, we've got a lot of tools, and it all starts with the product profile and then the skill and experience of our team.

Maury, I would argue who's done a better job of switching patients from TAKHZYRO than BioCryst, right, at least to this point. So I have a high degree of confidence that they'll be successful.

Got it. Okay. I want to talk briefly about your pediatric opportunity. You've got PDUFA coming up December 12. Can you say if you're in labeling discussions? And maybe comment on how pricing is going to work for this.

Yes. We're in normal discussions that you would have with the FDA at this stage. So we think everything is on track. You can't say anything to 100% until you get there, but we're in the normal discussions at this point.

And then what we expect to have is 4 different granule presentations, weight-based for kids and that the pricing will be equivalent to capsules. So each of the granules will be in individual sachets, daily sachets, and the pricing will be equivalent to the capsules.

Got it. And anything more you can comment on just how you expect the label to look and just the ramp-up in the setting?

I mean the label will look pretty -- we would expect to be pretty simple, which is age, HAE, what are the doses for what weight bands. There's not going to be a whole lot of additional -- the study was relatively small, 29 patients, open label. So it's not going to include efficacy data or a lot of differentiating safety data in the label.

What I can tell you is of those 29 patients, the retention in the trial, 93% of them made it to 12 months on the trial. And then 83% of them are still on the therapy. And so really good reduction in attacks and a very clean adverse event profile for the kids on the granules.

Got it. Okay. So let's talk about Netherton. So you've got data update first quarter of next year. How are you setting expectations for that? And how would you define success?

So the big thing for next year with Netherton it's a really -- it's a rare but really nasty skin disease cause is overactive skin turnover based on a missing regulatory protein. And by the end of Q1, we expect to have a small handful, maybe a couple of patients of data who have dosed 3. It's going to be an every 2-week injection.

What I think is going to be most interesting is by later in the year, we'll have about a dozen patients who have dosed for 3 months, so 6 doses over 3 months. So depending on the size of the effect, the long-term goal is to restore normal skin turnover.

Will 1 month of dosing be enough to show that? We don't know. But we think you would see that in the 3-month dosing a little bit later in the year. What we're excited about is we've showed in healthy volunteers that the drug gets to the epidermis. And so that was kind of a critical derisker because that's where the KLK5 is that needs to be inhibited. And so we would expect the drug to get to the skin of patients equally well.

Got it. And just to clarify, so the data later next year, would that be from Part 4 or Part 3?

That would be Part 4. And in fact, we don't have to wait for any Part 3 data to go into Part 4. So as soon as we can get patients starting to enroll and sites are getting up and running, the investigators are getting very excited about this. We'll really put our focus on Part 4, but we're likely to have data on a small number of patients at the end of Q1.

When would you know when you want to meet with FDA to discuss pivotal and...

Probably after Part 4 data. I mean the data in Part 4, there'll be some dose ranging within that and depending on the size of effect, will allow us to design the proposed clinical study and have good discussions with the FDA and other regulators. So it could be the kind of thing that sets us up to start a pivotal study in 2027.

Got it. And maybe briefly just talk about the market opportunity here for now.

Yes, the market opportunity, huge unmet need. No treatment on the market today for these patients. So we've identified 1,600 patients in health care claims data. But what we know from the experience of diseases like HAE, once you have therapies on the market, these rare diseases tend to grow.

So when CINRYZE was launched, the ViroPharma team thought that there were maybe 2,000 or 3,000 patients with HAE in the U.S. Now there are 11,000. And so that 1,600 number is likely to grow. We're doing more work to figure out how big we think that might be, but it's probably going to be a multiple of 1,600.

Got it. Okay. So a decent-sized rare disease opportunity. And for DME, maybe just provide a quick status update on that one. And is that update going to be in a press release or...

The main update for DME that we announced at the end of our Q3 earnings is once we finish the first 9 patients, so it's 3 ascending -- single ascending dose cohorts with that; our plan is to spin that out, license it out.

It's -- obviously, it's not a rare disease, and we'd like to find a partner who is willing to pay for those ongoing studies and that maybe we can share in the upside longer term. But we're not going to pursue that past those first 9 patients. We'll have initial data in the first quarter of next year on the initial cohort of patients.

Got it. Okay. So we're out of time. Maybe, Babar, do you want to just comment on just the potential BD activity that you can implement and just how to think about expenses going forward as well?

Yes. I'll address the expenses first. As you are aware that at the recent earnings release, we sharpened our expense guidance. We lowered guidance from $440 million to $450 million to $430 million to $440 million. We're seeing a little bit of improvement in how we're running our businesses.

The European divestiture gives us an immense opportunity to clean that operating structure further. So when we come out in January and provide you guidance as a stand-alone business because Astria would not have closed, you will see that the ORLADEYO still continues to grow at a double-digit clip and expenses will be significantly reduced. So our operating profitability and margins will be significantly better.

Now Astria is expected, as Charlie mentioned, to close in -- somewhere in Q1 of 2026, and we'll integrate the business, and we'll be ready to share their burn rate and what that additional burn rate that we will encumber somewhere at the end of Q1. But having said that, we are anticipating that we still be profitable. We'll continue our profitability. We'll continue to be cash flow positive.

But really, as Charlie mentioned, that we are at steady-state cost structure. So going forward, looking at 2027 and beyond, our operating expenses will actually come down because most of the Astria clinical trial will be done, and we're not rebuilding a commercial team to launch. So the ORLADEYO continues to grow, and expenses are steady state, growing at a very sort of low clip. So 2027, 2028 and beyond, operating profitability is going to be significantly higher.

And then naturally, with the anticipated approval of Navenibart in 2029, that's all synergies basically. It's the top line and then gross profit that falls directly to the bottom line.

So that comes to the next logical question about BD. I think we have some really important catalysts in Netherton syndrome next year. But we will continue to look at new opportunities. I think not every opportunity we look at has to be a blockbuster potential. With the infrastructure that we have, we could have a peak opportunity of $300 million to $400 million top line and can still deliver a lot of bottom line benefit. So we'll be very capital disciplined in terms of how we go about doing BD from this point onwards.

But rare and high probability of success in later stage.

Yes. Our internal R&D engine is really good at sort of the early stage part, and we'll supplement it with more later stage. So it will be -- we hope that the new BioCryst will be a very emerging product story over the next years to come.

Got it. Thanks so much for joining us today.

Thanks for having us.

Good day, and welcome to BioCryst Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Nick Wilder. Please go ahead.

Good morning, and welcome to BioCryst's Third Quarter 2025 Corporate Update and Financial Results Conference Call. Participating with me today are CEO, Jon Stonehouse; President and Chief Commercial Officer, Charlie Gayer; Chief Development Officer, Dr. Bill Sheridan; and Chief Financial Officer, Babar Ghias.

A press release and slide presentation about today's news are available on our Investor Relations website. Today's call may contain forward-looking statements, including statements regarding future financial 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. For additional information, including a detailed discussion of these risks, please refer to Slide 2 of the presentation.

In addition, today's conference call includes non-GAAP financial measures. For a reconciliation of these non-GAAP measures against the most directly comparable GAAP financial measure, please refer to the earnings press release.

I'd now like to turn the call over to Jon Stonehouse.

Thank you, Nick. We are very pleased to report yet another strong quarter for the year. Starting with ORLADEYO, we continue to see strong revenue growth year-over-year on a growing revenue base, well on our way to $1 billion at peak. Charlie will share the details as this was the first quarter with new competition, and we continue to see strong underlying growth and a growing prescriber base as we predicted.

Next, we closed the sale of our European business and paid off our Pharmakon debt. And this not only cleaned up our balance sheet, but put us in a very strong financial position, generating operating profit and positive cash flow. Babar will share more details regarding our financial position.

We are also making progress with our pipeline and expect early data that should give an initial view on activity and dose from our DME program, and we plan to share this early next year. If these data are encouraging, we have also made a decision that given the program is outside our rare disease area of focus, we will look to spin out or partner this program to put it in the hands of someone better suited to advance it further.

Regarding BCX17725, Bill will share encouraging data from our healthy volunteer study showing evidence that the drug does get to the skin following IV administration. This is important as this is where the target for Netherton syndrome is and with a very potent inhibitor in BCX17725, we are excited to see in Netherton syndrome patients what effect it has on the disease. Enrollment is taking a little bit longer than planned, and we now expect early data in a small number of Netherton syndrome patients later in Q1 next year.

Lastly, having announced the proposed acquisition of Astria last month and the expected close in Q1 next year, we are extremely excited to add a late-stage asset, navenibart, to our pipeline to leverage our expertise in HAE and bring patients a new treatment option with a low burden of administration. So clearly, we have been busy since last reporting quarterly earnings, and this is shaping up to be another outstanding year of performance for our company.

With that, I will turn it over to Charlie.

Thanks, Jon. We entered the final quarter of 2025 with continued momentum. We are raising our ORLADEYO revenue guidance to between $590 million and $600 million for the year, even after closing the sale of our European operations on October 1. And the exciting possibilities of the ORLADEYO granules launch for kids with HAE and the acquisition of Astria are just ahead. ORLADEYO continues to be the most differentiated prophylaxis therapy for patients with HAE. Most HAE patients would rather prevent their attacks with an oral therapy. Physicians know this, and they trust ORLADEYO.

Even as 2 new prophylaxis products launched recently, offering patients the potential of once monthly injectable dosing, new prescriptions for ORLADEYO continued at the same strong pace we have seen over the past 2 years. In fact, we slightly exceeded the new patient prescription total from the third quarter a year ago. We also continue to expand the number of ORLADEYO prescribers with 64 new prescribers in the U.S., exceeding the average of the past 8 quarters. The well-established trends in patient retention remained unchanged, and we ended the quarter with a paid patient rate of 82%, right in line with the typical second half pattern compared with the first half of the year.

As always, we're very pleased with the great results, but not surprised. Our deep insight and market simulation works consistently predicted that the growth of ORLADEYO would not be affected by new competition. We updated that work over the summer, and the 2025 results were nearly identical to the 2024 results, as you can see on Slide 8 in today's presentation. With the expected addition of ORLADEYO granules on top of the existing strong growth trends for ORLADEYO capsules, our market simulation continues to predict $1 billion in peak revenue for BioCryst in 2029, even after the sale of our European business.

The analysis demonstrates that new injectable therapies primarily compete with existing injectable therapies. This is why we are so enthusiastic about the prospect of adding navenibart to our portfolio. With navenibart, we could have the lowest burden, most differentiated injectable prophylactic therapy, along with a long-time leading oral therapy, significantly expanding our ability to help patients in the HAE community. We expect navenibart to drive double-digit HAE revenue growth well into the 2030s after ORLADEYO revenue reaches a steady plateau. And we expect to manage costs by using the same rare disease commercialization engine that has made ORLADEYO so successful.

Today, I'm also very pleased to announce that Ron Dullinger will succeed me as Chief Commercial Officer when I move to the CEO role on January 1. Ron led the sales team at ViroPharma during the early days of CINRYZE commercialization. While that drug changed the HAE treatment paradigm at the time, Ron always knew that an oral therapy was what many patients really wanted, and he wanted to be part of making that possible. Ron joined us in 2019 to build and lead the U.S. team -- U.S. sales team for the launch of ORLADEYO. And since 2022, he has served as General Manager of our U.S. and Americas business, fostering a team culture that is deeply caring and authentically focused on serving patients while also being relentlessly driven to improve. That's a rare combination, and it has produced amazing results. I look forward to what our commercial team will achieve under Ron's leadership.

As we look forward to helping a growing number of HAE patients, our excitement about the potential to help patients with Netherton syndrome is also growing.

I'll turn it over to Bill to describe our progress with BCX17725.

Thanks, Charlie. I'm very pleased to be able to share some findings from our ongoing Phase I study of BCX17725, our novel investigational KLK5 inhibitor designed to replace functions of the natural inhibitor that are deficient in individuals living with Netherton syndrome. This trial is designed with multiple goals in mind: number one, understanding the preliminary safety profile of BCX17725; number two, quantitating its systemic exposure with serum drug levels; number three, evaluating the distribution of the drug into the epidermis. This is very important because the target enzyme, KLK5 is expressed in that location. Number four, assessing its potential early treatment effects on signs and symptoms of Netherton syndrome. We are planning to first do this in a few individuals living with NS in Part 3 of the trial.

The trial has so far progressed through multiple cohorts in healthy volunteers with different cohorts administered single or multiple doses of study drug. This gives us a handle on the first 3 goals. The dose level of BCX17725 has been progressively increased with up to 12 milligrams per kilogram administered by IV infusion. In the multiple ascending dose portion, 3 doses were given on a Q2-week schedule. In this trial, administration of BCX17725 has been safe and well tolerated with no safety signals seen and preliminary assessment of systemic exposure profiles supports continued testing of up to every 2 weeks dosing regimens.

Some representative images from skin biopsies taken before and after dosing in healthy subjects are shown on the accompanying slide. These small punch biopsies are taken under local anesthetic and processed for imaging. The images shown use a technique called immunofluorescence microscopy. Antibodies are applied that specifically bind to the protein you want to detect, in this case, the drug, BCX17725. These complexes are then detected with secondary antibodies, covalently tagged with a fluorochrome, which is a chemical that fluorescence typically under ultraviolet or near ultraviolet light. That means we can see a specific color based on the fluorochrome used wherever the drug is located in the tissue specimen and the more drug there is, the brighter the signal.

We can also use other differently colored fluorochromes to pick out structures such as cell nuclei. Although minimally invasive, we are limited in the number of biopsies we can take. So we decided to obtain a baseline biopsy prior to the first dose as a control sample and a post-dose biopsy 5 hours after the last dose of drug. The displayed biopsy sample images from a representative healthy volunteer in the 12-milligram per kilogram multiple dose cohort show the DNA located in cell nuclei in blue and the drug located in the extracellular matrix in green. The pre-dose sample shows the loose dermis with widely spaced bright blue nuclei and the dense epidermis with tightly packed nuclei with a very faint green signal due to nonspecific binding of the assay reagents.

In the post-dose sample, there is an obvious difference with much brighter green fluorescence. You can use the blue nuclei as a benchmark. In the post-dose image, drug has flooded the loose connective tissue in the dermis and distributed throughout the epidermis. These are important findings. The drug was able to diffuse across the epidermal basement membrane into the extracellular matrix of all the layers of the epidermis. Drug getting to the epidermis will allow its access to the target enzyme KLK5 in patients with Netherton syndrome. Our investigators are quite excited by these results as are we, and we look forward to enrolling patients with NS into the trial in coming months.

I'd now like to turn the call to Babar to walk you through the financial progress.

Thanks, Will. My first full quarter as CFO of BioCryst was extremely eventful and was marked by several significant achievements, which I believe position us well for future growth and profitability. On October 1, we successfully closed the sale of our European business, providing an immediate boost to our financial position, enabling us to fully repay our Pharmakon debt.

During Q3, we worked diligently on a highly strategic and transformative acquisition of Astria Therapeutics, which we announced last month, an acquisition which is expected to strengthen our presence in HAE and solidify double-digit growth trajectory for our portfolio over the next decade. As part of this proposed transaction, we also worked on securing a strategic financing partnership with Blackstone at a highly attractive cost of capital. Upon closing of the Astria acquisition, which is expected in Q1 2026, we will access up to $400 million of cash from this facility.

But all of this was only made possible due to the continued strength of ORLADEYO and our improving operating performance. Please refer to our third quarter financials in today's press release. However, I would like to take a moment to elaborate on some of these accomplishments and their impact on our trajectory.

Total ORLADEYO revenue was $159.1 million, representing 37% year-over-year growth. Of that ORLADEYO revenue, $141.6 million or 89% came from the U.S. As you heard in Charlie's remarks, we continue to see strong momentum in our business despite the recently announced approvals. Non-GAAP operating expenses, excluding stock-based comp and transaction-related costs were approximately $108 million (sic) [ $118 million ] for the third quarter of 2025, up from approximately $92 million in the third quarter of 2024.

Some of this increase was driven by continued investment in R&D, which continues to be a priority for us. As you heard from Bill, we are very excited about the promise of these programs. We have also made a strategic decision to seek partners for our DME program after we evaluate initial patient data, in light of sharpening our focus on rare diseases and focusing our capital allocation on programs where we can create most value.

Non-GAAP operating profit, excluding stock-based compensation expense and transaction-related costs was $51.7 million for the third quarter of 2025 an increase of 107% year-over-year as we continue to benefit from significant operating leverage. Our non-GAAP net income for the quarter was $35.6 million, resulting in non-GAAP EPS of $0.17 per share. We finished the quarter strong with $269 million in cash, which included cash held for sale by European entities. Our strong cash flow profile enabled us to make a $50 million prepayment on our Pharmakon term loan during Q3. And with the closing of the sale of European business, we also paid off the outstanding amount under the term loan of approximately $200 million.

Our pro forma cash balance giving effect to these adjustments is approximately $294 million and 0 term debt. Due to the strong expected cash flow generation, we anticipate reaching $1 billion in cash during 2029. However, we will continue to evaluate various capital allocation opportunities to generate value for our stockholders, much like our recently announced proposed acquisition of Astria Therapeutics. We will also explore upon closing of the transaction, a European license of navenibart and strategic opportunities for the STAR-0310 program, which may yield further upsides.

Moving on to guidance. Charlie already alluded to the revenue guidance, and at the same time, we are lowering our non-GAAP OpEx guidance to $430 million to $440 million from our original guidance of $440 million to $450 million. The European divestiture allows us the opportunity to continue to streamline our base business cost structure. We remain on track to deliver non-GAAP net income and positive cash flows for full year 2025. As previously stated in our acquisition press release, we are expecting to stay profitable on a non-GAAP basis as well as cash flow positive even during the development period of navenibart.

In closing, I'm proud of our team's continued focus and execution as we work to drive sustainable growth and deliver meaningful improvements in patients' lives. Our strong results and disciplined operational and financial strategies position us to capitalize on future growth opportunities, strengthen our leadership in rare diseases and continue delivering value for our stockholders.

Operator, we are now ready for your questions.

[Operator Instructions] First question comes from Jessica Fye with JPMorgan.

This is Jose for Jessica. Of the 37% year-over-year ORLADEYO net revenue growth, how much of that was volume? And how much of that was better paid rate or net price? And on that front, how should we think about gross to net this quarter and going into 2026? And very quickly, how confident are you that you can maintain steady patient retention rates given the increasingly competitive landscape?

I can start with that question. So of the 37% year-over-year, we had really steady -- we've had very steady volume growth over time, but there was a big portion of it that was price based on the improvement in paid rate that we described earlier this year, particularly in the Medicare segment. So the volume is growing at the pace that we expect and at the pace that we need to get to the $1 billion in peak revenue in 2029.

As far as the patient retention with new competition coming in, as I mentioned in the remarks, our patient retention has been identical to our ongoing trend, not affected at all by the new products coming in the market, and we expect that to continue.

Yes. And I'd just add, the logic behind that is these patients are really well controlled. They're getting similar control to injectable drugs, and they're on a once a day pill. And so what on earth would they switch to that could be better than that.

And then gross to net is still about 15%, as we've announced earlier this year.

And next year in that 15% to 20%...

Yes. Next year, it will still be in the 15% to 20%, probably a little closer to the 15%.

The next question comes from Laura Chico with Wedbush Securities.

One question with respect to the new prescriber numbers. I think this is the second quarter in a row you've been over 60. Just curious if you have any feedback, market research that can help us understand why they're deciding to prescribe now? What has been kind of the motivating factor more recently to accelerate the adds here? And then I guess, if you could share a little bit more color on what would the expected blended royalty rate look like in '26? I know you're projecting a step down over time here, but just kind of curious how we should be thinking about it directionally from '25 to '26.

I'll start with -- thanks, Laura. I'll start with the prescriber data and then hand it over to Babar on the royalties. So the motivating factors, and we've described this before, is just physicians getting more and more comfortable with the long-term evidence, the real-world evidence for how well ORLADEYO works. What they understand now is that ORLADEYO works very well, equally well to injectable products in most patients. It either works or it doesn't. And if the patients don't have the benefit that they need, they move on. So physicians are really understanding that. That's the first part.

The second part is our ability to find prescribers in this market and accurately target means that we are able to find physicians who have a smaller number of patients. So if you have one HAE patient, we will find you and ORLADEYO is becoming the treatment of choice for those doctors. Overall, as we grow the number of physicians, we consistently see a pretty equal balance between those smaller prescribers as well as the top 600 or so doctors that treat 50% of the market. So we keep chipping away at those top prescribers and launch to date over 80% of those doctors have prescribed. So we're really thrilled to show this consistent progress expanding the number of prescribers.

And just one other thing I'd like to add, Charlie is, there's still physicians out there even in the top prescribers that haven't written for ORLADEYO. And one of the things we're extremely excited about next year is the pediatric approval because these docs have pediatric patients, many of them, and there is no reason that they should use anything but ORLADEYO for prophylaxis for these patients. So we think that's going to open up even more new prescribers next year.

Yes. And on the royalty section, we are pleased to share that this quarter, we are tripping over the lower threshold, and it will continue to come down. As you can see in our slides, prepared slides, the rate is in the early -- the blended rate is in early teens. And while we have not given 2026 guidance, I can assure you that rate continues to come down because there's a cap on some of those royalties when you hit the $550 million. But as you can imagine, when we are out to provide you guidance, when you do the math, it will be -- it will continue to decline. And as we've said, over time, it will be in single-digits as we pay off the OMERS liability altogether.

Yes. So as revenue goes up, profitability gets better and better and cash flow continues to flow. So it's a very bright financial future.

The next question comes from Stacy Ku with TD Cowen.

Congrats on the progress. So we have a couple of questions. First, on the new entrants, our KOLs do indicate there are a couple of patients switching from ORLADEYO to injectables, but the same clinicians are also saying that they expect ORLADEYO's share to stay stable. So beyond this anecdotal feedback and obviously, you all have highlighted the 1-year 60% retention. Are you able to share any recent metrics to suggest ORLADEYO is unlikely to be impacted by these injectable entrants? That's the first question.

And then the second is on that pediatric HAE approval. As we approach the PDUFA date, maybe help us understand your views on the opportunity and what commercial strategy and preparation is ongoing to really make sure you all maximize that pediatric expansion? Are many of these patients already identified? Just help us understand as we get to the new year, any type of expectations around maybe some latent patient demand.

Sure. Thanks, Stacy. As far as the new entrants, yes, of course, some patients are switching from ORLADEYO because 40% of new patient starts on ORLADEYO drop off within the year. And in the past, they might have dropped off to TAKHZYRO and HAEGARDA, now maybe they're more likely to switch to some of the new entrants. So that's exactly what we expected. What we're not seeing, though, is a change in our new patient prescribing patterns or a change in our overall retention rate.

And as far as the data that give us confidence in this, as I mentioned, Slide 8, we redid our market research. We redid our big conjoint analysis and market simulation with all the new information about new and future competitors. And what you see is no change to our prior versions of this market research. It shows that ORLADEYO remains -- ORLADEYO patients remain very sticky, and we expect that to continue.

As far as the pediatric approval, we see that there are about 500 patients today diagnosed with HAE under age 12. And only about 40% of those patients today are on or kind of in the prophylaxis space have tried prophylaxis. So we think that there's an opportunity both to grow the use of prophylaxis within pediatrics as well as for switching because an oral therapy is important to a lot of patients, but it's particularly important to kids with HAE.

So as far as our strategy, and Jon mentioned earlier, the doctors that treat kids with HAE tend to be the same physicians that are treating patients over age 12. So we're already calling on these physicians. We know who is treating kids, and the team will be ready to go with the launch shortly after approval.

The next question comes from Steve Seedhouse with Cantor.

I was hoping you could expand on the decision to deemphasize, I guess, avoralstat for DME. Have you had an early look at the Phase I data there? And then looking at the updated pipeline slide, the undisclosed programs listed for rare diseases, at least that are preclinical. Can you give us some insights into what you're working on there preclinically and how close it might be to the clinic?

Yes, I'll take that one. So regarding avoralstat, no, we haven't seen any of the data. We just enrolled the first cohort. And so this is a decision based on focus and expense. And by bringing a late-stage product like navenibart into our pipeline, we need to create space to be able to fund and bring that to the finish line. And these DME programs get really expensive the further on you go in clinical development. And quite honestly, we don't have the expertise there we do in rare disease. And so we just think it's better in the hands of somebody who has that expertise.

And then on the undisclosed, we're not going to disclose what it is. It's early. It's exciting. But when it's ready to be shared, we'll have more information to share with you.

Okay. And just quick on Netherton. Have you had any dialogue with regulators there and forming an understanding of what a pivotal program requirement might be?

Yes, we have. Not enough to share with you the design of the pivotal program at this point. I think the biggest thing, and Bill, you can correct me if I get this wrong, is the bigger the treatment effect, the better options we have to move fast with this program. And we'll figure that out once we start getting data. But too early to predict kind of the design of the pivotal program. Is that fair, Bill?

That's very fair. I think once we have evidence of the effects of the drug in patients with NS and the safety of the drug in NS, then we'll have complete conversations with regulators about how to get it approved.

The next question comes from Maurice Raycroft with Jefferies.

Congrats on the progress. I'll just ask a couple of quick ones on Netherton. Wondering if you could just talk more about the slower enrollment there and how many patients you'll have in the first quarter data update next year? And do you anticipate dosing higher than the 12 mg per kg? And I'm wondering if you're still exploring the subcu dose? Or is it going to be an IV dosing going forward?

Yes, I'll take the first part of it. You want to take the second. We're only off by a quarter. So it's a very slight delay in the program. And the enthusiasm, as Bill said, by investigators is really high, especially when they see the healthy volunteer data. We didn't expect to see the drug get to the target in healthy volunteers. And so that has been really encouraging data. And then, Bill, do you want to take the second part of the question?

Sure. Yes, we're exploring both subcutaneous and intravenous administration. We'll continue to do that. And we may explore higher doses, that option is open.

The next question comes from Brian Abrahams with RBC.

Congrats on the continued progress in the quarter. Maybe just continuing on Netherton. Can you elaborate a little bit more on, I guess, what you're seeing from a PK/PD standpoint in those first couple of parts of the ongoing study? And I'm also curious what the trigger was for starting that Part 4, which I know you started in recent weeks.

And then just secondarily, separately on ORLADEYO, just wondering what you're seeing in terms of demand from the normal C1 inhibitor population. I think that was a growth driver you cited in the past.

Bill, do you want to take the Netherton and Charlie can take the ORLADEYO?

Sure. So Netherton is a fascinating disease. So it's all about what's happening in the epidermis. There aren't any plasma or serum biomarkers to measure. Secondly, we have a very tight binding, very potent inhibitor. And you have to think about what relationship the plasma concentration is going to have to the effects in the epidermis. And there could, in fact, be a disconnect between how long the drug sits in the epidermis after binding to the target compared to how long it circulates in the plasma.

That being said, of course, we're measuring the blood concentrations of the drug, nothing unexpected there. Solely on that basis, we think that it's worth continuing to explore up to every 2 weeks dosing. But really, it's going to be looking at the effects on the disease. There aren't any pharmacodynamic markers to measure. It's the effects on the disease in patients with Netherton and when we get into that.

Just a clarification, we have not disclosed whether we've started Part 3 or Part 4. Part 3 is just a few subjects with short-term dosing. That's the design. Part 4 enables longer-term dosing, and we look forward to stepping through both of those.

Yes. And the expectation is that the data we'll have in the first quarter is Part 3. Charlie?

Yes. Brian, on C1 normal patients, launch to date, that's been about 1/3 of the patients on ORLADEYO, and that's what we saw in Q3. Q2, you might recall, we had an exceptional best ever quarter for new patient starts. There was an additional bolus of C1 normal patients in Q2 because we released some new data. Q3 looked like the steady high demand that we've seen over the last 2 years with about 1/3 of the patients being C1 normal.

The next question is from the line of Jon Wolleben with Citizens.

Just looking at sales so far this year in your guidance, it's implying that we're going to see a drop in quarter-over-quarter sales for the first time. We haven't seen that seasonality before. So hoping you could talk a little bit about your expectations, what's driving that? And if that's something we should expect moving forward or if this is going to be a one-time seasonality effect?

Yes, Jon, it's going to be a one-time seasonality because we just sold our European business. So we're losing the sort of $10 million to $15 million of revenue that otherwise would have occurred. So next year, you will not see a drop in Q4.

Mr. Jon, does that answer your question?

Yes.

The next question comes from Belanger Serge with Needham & Co.

This is John on for Serge today. Just wanted to touch on pediatric ORLADEYO with the ongoing review and the PDUFA in mid-December. Just curious if you guys have seen any impacts from the government shutdown, whether you've had continuous feedback from the FDA and whether you expect them to still meet that PDUFA. And then pending product availability, do you have any expectations for how the payer landscape will look in this segment? And whether or not you could expect a bolus of patients to come on board early upon product launch?

So I'll take the first part. Charlie, you take the second. So with regard to the interactions with FDA, we're getting closer to the PDUFA date, and we're going through the things you think you would be going through at this point, late-stage in the review process. So there's nothing that we see that gives us concern about the government shutdown, that could change, but at least where we sit today, nothing that we see.

And John, as far as payer landscape, we are in a really great spot with payers with ORLADEYO, and we expect the peds indication to slide right into that. So nothing special on the payer front. As far as the bolus of patients, we know that there's a lot of anticipation for this product. I'm sure we'll update you after we launch and get product into the market, we'll update you in 2026 as to the pace of patient growth.

The next question comes from Gena Wang with Barclays.

Wanted to ask about the Netherton syndrome also regarding the 12-milligram per kg IV dosing, by the way, very impressive biomarker data. I'm wondering what kind of safety you see in the patient -- in the healthy volunteer data? And then also, regarding the first quarter, the Part 3 data. So maybe if you can lay out what we should expect from this 1Q '26 data update from Part 3?

And quickly, just housekeeping questions regarding ORLADEYO. I know you mentioned some of the comments, but I do wanted to double check with the actual numbers regarding the retention rate, are we still similar around 60% and the pay rate, I think last quarter, we talked about could be by year-end, 82% to 83%. Is that still the same? And then lastly is the patient segment, 50% switch from other prophy, is that still the same?

All right. So Bill, why don't you take the safety and the design of the Part 3? And then Charlie, you can take the ORLADEYO.

So there's -- really, the thing to say about safety in healthy subjects is that it's very safe so far, it's been very safe and well tolerated. So there have been no safety signals emerging with multiple doses of the drug through the dose that you mentioned. So that's really good news. I think that with regard to what you can expect from Part 3, this is very short-term administration of the drug in Part 3. We're at the cutting edge of clinical science and investigations into Netherton syndrome with a parenteral drug. So we'll be discovering how long it takes in order to get an effect. So I don't know that yet.

Will that short-term administration be enough to see an effect? Don't know. If we do, that would be very encouraging. If we don't, we'll just give the drug for longer and maybe we'll increase the dose. So I think I would temper expectations with regard to what we might see from short-term dosing in a few subjects with Netherton. Obviously, we'll be looking at safety. So we'll learn a lot and look forward to extending the dosing in Part 4 of the study. The sorts of things that you would measure are pretty obvious, itch, pain, skin redness and the like.

And Bill, we're testing multiple doses in the Part 3. So we'll get that and start to zoom in on what we then want to look at Part 4. Is that right?

It's the first step for more extensive testing in Part 4.

Great. Charlie?

And Gena, as far as the ORLADEYO numbers, so yes, the patient retention rate is in line with exactly what we've seen over the last several years. So 60% of patients who start ORLADEYO make it to a year. And everything that we saw in Q3 tells us we're right on track with that same number. The paid rate, we ended Q3 at 82%, which is right about where we thought we would be. In Q4, I wouldn't be surprised if we end closer to 81%, even 80%.

Typically, in the second half of the year, the paid rate starts to decline because we have all these new patients coming in and less of an opportunity to switch people from long-term free product to paid product. That opportunity comes in Q1 into early Q2 of the new year. And so we're right on track for where we need to be, and we expect to have a lot of those patients then switching to paid therapy earlier in 2026.

And then as far as the source of business for patients, yes, the same basic trends where we get close to 50% of the people switching from other prophy history with other prophy products and then other patients switching from acute only coming over to prophy. And then a good number of patients, best we can tell, are starting ORLADEYO as their first HAE treatment ever because more of those are newly diagnosed patients.

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Jon Stonehouse for any closing remarks.

Yes. We thought about ending the call with the rolling stones. This will be the last time, but thought different of it. But let me say this, it's been an honor to lead the employees of BioCryst for nearly the last 2 decades. Proud of what we built, what we've accomplished together and extremely excited and confident to see this team take the company into the future by delivering more and more innovative treatments for patients living with rare disease because in this industry, that's how you create real value. So thank you for your interest in our company and have a great day.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the BioCryst Pharmaceuticals Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Nick Wilder with BioCryst. Please go ahead.

Good morning, and welcome to BioCryst's conference call to discuss its proposed acquisition of Astria Therapeutics. Participating with me today are CEO, Jon Stonehouse; President and Chief Commercial Officer, Charlie Gayer; and Chief Financial Officer, Babar Ghias.

A press release and slide presentation about today's news are available on our Investor Relations website. Today's conference call will contain forward-looking statements, including statements related to the proposed transaction, including financial estimates and statements as to the expected timing, completion and effects of the transaction. 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.

For additional information, including a detailed discussion of these risks, please refer to Slides 2 and 3 of the presentation.

I'd now like to turn the call over to Jon Stonehouse.

Thanks, Nick. We are very excited to announce the acquisition of Astria today. This strategic move will be the source of the next product to market for BioCryst that supports our strategy in several ways.

Let me start by reminding you of the growth pillars of our strategy, so you understand where the deal fits. The first pillar is we have a highly profitable growing product in ORLADEYO, that is on its way to $1 billion at peak around the end of the decade and IP protection out to 2040. ORLADEYO is the source of double-digit revenue growth for the next few years before we bring other products to market.

The other two pillars are intended to answer so what comes after ORLADEYO. The sources for this are our discovery engine and business development. In both cases, we're focused on rare disease assets as we've built a highly effective commercial engine and supporting infrastructure to drive ORLADEYO growth. This will be leveraged to support and drive growth and profit for future rare disease products.

So, the next products to fulfill this strategy are from our discovery team, we are currently developing BCX17725, a promising early-stage compound to address patients living with Netherton syndrome.

And today, with the announcement of the acquisition of Astria, we are adding a late-stage compound for patients with HAE, Navenibart to our pipeline. We believe Navenibart is a perfect fit next product for our company, and Charlie and Babar will explain why.

With that, I'll pass the call to Charlie.

Thanks, Jon. We have watched Astria with great interest for several years, because we knew they were developing something special. So, this is a very exciting day for us. Beyond what this transaction means for BioCryst, we believe it will mean even more for patients.

BioCryst started engaging with the HAE community over a decade ago, when we began our first oral therapy development program. What we learned then and have continued to learn over the many years is how important it is for patients to have treatment options that meet their needs.

With ORLADEYO, it was the promise of a safe and effective targeted oral therapy to prevent attacks. And we are grateful to the patient community, because we would not have succeeded without their support and encouragement. ORLADEYO continues to grow as expected. We had another strong quarter for demand in Q3, in line with what we have seen over the past 2 years with no impact from new competition. This tells us what we already know from our deep market insight work.

Patients only switch therapy if another option satisfies an unmet need in a meaningful way. We believe Navenibart is a potentially transformative therapy that will meet the needs of many patients, particularly those who are already on injectable prophylaxis therapy.

There's about 5,000 HAE patients in the United States alone. The potential for Navenibart to be transformative is especially true for patients on TAKHZYRO, the current market leader. TAKHZYRO is a very effective drug. And TAKHZYRO and ORLADEYO have established a kallikrein inhibition as the standard for HAE prophylaxis. But roughly 70% to 80% of patients on TAKHZYRO require injections every 2 weeks based on real-world data presented by the manufacturer. A sizable proportion of patients are willing to treat that way despite a high rate of injection pain, because the treatment controls their attacks.

But what if they could control their attacks with similar efficacy with an injection that doesn't hurt and do it 2x to 4x per year instead of 24x or even 12x per year. Low dosing frequency is the main remaining unmet need identified by HAE patients and their physicians. And they see every 3-month dosing as the tipping point that would motivate a switch. That is the potential of Navenibart.

The opportunity to bring this potentially best-in-class product to patients is incredibly exciting for us. We believe our team at BioCryst is second to none in terms of commercial execution in the rare disease and HAE space. Our team has deep HAE experience. We have the ability to use real-time customer data. We have the ability to market directly to thousands of HAE patients and HAE treaters. This experience and expertise will allow us to accelerate the launch curve for Navenibart and help the greatest number of patients even as ORLADEYO reaches and maintains peak revenue of $1 billion.

With the two products together, we believe our HAE portfolio could drive double-digit annual revenue growth that will reach at least $1.8 billion by 2033.

I'll turn it over to Babar to describe this transaction in more detail and how it will be transformative for BioCryst.

Thanks, Charlie. On our last earnings call, right after we announced the sale of our European business, we emphasized the role of BD as one of our key growth pillars, which Jon described earlier. We shared that this growth would come from both HAE and non-HAE opportunities as our plan is to be a rare disease consolidator. We said that the first deal needs to make very clear strategic sense. And while finding the right opportunity can take some time, I am thrilled that our first transaction checks all the strategic boxes and timing could not be more perfect.

ORLADEYO continues to deliver strong performance and with a steady-state cost structure, every dollar of growth is now contributing significantly to our operating profitability and cash flow generation. With the addition of Navenibart to our portfolio upon closing of the transaction, we will be poised to deliver double-digit growth upon potential approval and more impressively, on a significantly larger revenue base.

We expect very minimal incremental SG&A investment required to commercialize Navenibart, as we have put in place already one of the best commercial engines in the rare disease space. That low investment, combined with accelerated revenue is expected to supercharge our earnings growth well into the next decade.

Let me comment on the near-term financial impact of the acquisition. We have shared with you that with the closing of the sale of our European business, our cost structure will be simplified and our operating profitability on a stand-alone basis is expected to significantly improve. So, even after absorbing the R&D development spend of Navenibart, we will remain highly profitable on a non-GAAP basis and cash flow positive.

We expect the first full year of revenue after Navenibart's anticipated launch, we will be significantly accretive to operating profit. We will guide to the relevant combined numbers post closing of the transaction, which is expected in Q1 of 2026. We will be financing this acquisition with a mix of BioCryst equity issued to Astria shareholders to enable them to participate in the upside here and the remainder with cash.

With the sale of our European business, we have retired the remaining Pharmakon debt of approximately $200 million. To finance this new acquisition, we have entered into a strategic financing partnership with Blackstone at a highly attractive cost of capital with access to up to $400 million of cash for this transaction.

Due to our continued growth behind ORLADEYO and improving cash flow profile, we anticipate to achieve over $1 billion of cash on hand by 2029. Our plan is to continue our strategy of becoming a rare disease consolidator and the partnership with Blackstone provides us with further access to capital. This acquisition timing is perfect as we are hitting so many critical milestones for the business. But most importantly, I'm excited about what this means for the patients. We are uniquely positioned to continue the growth of ORLADEYO and accelerate the vision of Navenibart, meeting the needs of patients with multiple therapeutic options.

We will now open the call for Q&A.

[Operator Instructions] The first question today comes from Jessica Fye with JPMorgan.

The next question comes from Stacy Ku with TD Cowen.

Congratulations on this announcement. So first, just curious because we've been getting some investor feedback and questions. There is some precedence with Shire's acquisition of Dyax. But just comment maybe high level, your level of confidence, what you all are putting together, maybe the differences between oral and injectable in the market space and, let's say, separation there as we think about the Q1 closing. So, that's the first question.

And then, when it comes to the competitive landscape, can you just maybe talk about what work the team did when it comes to both public and private companies in the HAE prophylaxis space and how you went in on Navenibart? So that's the second, especially as we think about maybe some of the private companies that are coming along.

And then the last question is, maybe on Navenibart development. Do you expect early '27? And we understand this is still early days, but just given your relationships and assuming Q1 closing, do you expect early '27 will be conservative timing for results?

Yes. Let me take the first one, then Charlie, you can take the next two. So, the first one regarding precedent in the space of companies having more than one product like Takeda now, yes, there's more than one CSL as well. And so, there's definitely tons of precedent, and there's tons of competitors in the space. So, we think -- and Charlie said in his prepared remarks, these complement each other really well, and there's plenty of patients that still seek injectables that we think are an opportunity for us. Charlie?

Thanks, Jon. Yes. And what I'll add to the oral versus injectable as well is that, patients tend to have a very clear preference based on where they are. So, brand-new patients to prophy really prefer oral. Patients who are already doing well on an injectable would prefer to have an injectable that even better meets their needs, specifically with dosing. And so, that's where we think that this makes a lot of sense.

As far as the landscape for competition, as I mentioned in my prepared remarks, the real tipping point for patients on injectable therapy today that would make them switch is every 3-month dosing or better. And we think that Navenibart with a known profile with that potential for 3- to even 6-month dosing, and the fact that they're off to a good start with their clinical program gives this product a first-mover advantage. And so, as we've looked at other products, we think that Navenibart is likely to be the first one to launch with that profile.

And then, -- sorry, Stacy, I forgot your last question.

The last one was topline data in early '27.

Topline. Yes. So we think that, again, Astria has got a very strong team. They're doing all the right things. So, early 2027 data will be great. Of course, when we're able to complete this transaction, we have a lot of experience as well, and we'll do whatever we can to keep that timeline or improve it if we can.

And Stacy, the last thing I'd say on your second question is, this is a sticky market, as you very well know. And that first-mover advantage, if you've got patients that are well controlled with really convenient dosing, they're not going to switch to something that has similar dosing.

Okay. Wonderful. Well, congratulations. We obviously done a lot of work in the HAE space and also really like Astria. So, thanks.

The next question comes from Laura Chico with Wedbush Securities.

Congrats on the deal. I'm not sure who to direct the question to Jon, Babar. But could you talk a little bit more about the downstream revenue opportunity for Navenibart and kind of how you're building your assumptions there and the market opportunity and just kind of the overall peak assumptions? And then secondly, could you share any color on whether this was a competitive process?

So, yes. I think on the revenue, as we have shared with you, ORLADEYO continues its trend to be a $1 billion product. Naturally, we have a very high level of confidence on the Navenibart product. And so at this point, we're not sharing any projections. But what I can share with you very confidently is beyond -- Navenibart starts to hit our profile right when the growth for ORLADEYO comes to a steady state. So, that enables us to basically build on to that double-digit growth and well into the next decade. So, I think we are very confident that with the machinery that we have put in place, we will absolutely deliver on that double-digit growth.

And on the second question around competitive process, the proxy will go out from Astria, and you'll know the details of the process.

The next question comes from Steven Seedhouse with Cantor.

Congratulations on the proposed deal. Two questions. One is, I guess, I'm interested or maybe even surprised that you're not planning to develop the OX40 antibody that you're getting from Astria here as well. Is that because it doesn't fit in the sort of orphan disease strategic focus? Or is there something else to say there?

And then also, I would ask you to sort of expand your comments on just appetite for additional deals after this? Where does this leave you in terms of what you're thinking about in terms of being acquisitive going forward?

Yes. So I'll take the first one, and Babar will take the second. On OX40, we think it's a really interesting product, but it's not rare disease, and it's better in the hands of somebody that's in that area. So, that's the reason, that's the rationale. So you're correct. Babar?

Yes. So, I think, we've done a very transformative major acquisition. So, our first plan is to make sure that we make Navenibart the priority, and integrate this acquisition well. But naturally speaking, ORLADEYO will continue to put points on the board. And as we said that, while we anticipate that by 2029, we'll have $1 billion cash balance, we are not going to sit on that. So, our plan, once we've integrated, once we made sure Navenibart is on its way to potential enrollment success as it continues to do, we will be looking at other opportunities as well.

Yes. And I think -- listen, I've been in BioCryst for almost 19 years. This team just showed you that they have an appetite for this, and we'll continue to do this.

The next question comes from Brian Abrahams with RBC Capital Markets.

Congrats on the deal. Just commercially speaking, what are some of the different considerations that to take into account for marketing a long-acting injectable in the space? It sounds like there's going to be limited additional SG&A spend, but I'm just curious how that might adjust and where you might be making the commercial investments.

And then just secondarily, it sounds like most patients are on TAKHZYRO every 2 weeks and every 3-month dosing could be a tipping point, but HAE is also, can be a sticky market. So, I guess I'm curious what your market research tells you could be the potential conversion of patients from current to future long-acting injectables and maybe the types of patients who would switch?

Charlie, do you want to take those?

Sure, Brian. So as far as the different considerations, clearly, as we've laid out, the patients have strong preferences one way or another based on where they are in the market. And so, that will be a big part of our marketing campaign. I think, another really important part is getting patients access to therapy. And we've built, what we think is also a second to none program with helping patients with patient services and market access.

We've done a great job with ORLADEYO, and we would expect to do a great job with Navenibart given our services and the profile of the product. And as far as additional investments, we have -- we continue to believe we have the sales force that is the right size out there. We've got a great marketing team. There'll be incremental investments as we continue to grow with ORLADEYO on the patient services and market access side. But there really don't need to be huge investments. We -- one thing we do, do also very well is develop real-world evidence around our product, and we would expect to do that in the future with Navenibart. It's been an important part of our ORLADEYO story. It will be an important part of Navenibart as well in the future.

I mean, here's a simple exercise for those of you that cover Astria as well as you take our model with the growth of SG&A that you have planned and you take the revenue from Navenibart and you take the development cost for Navenibart, and that's it. And run that model.

The next question comes from Jon Wolleben with Citizens.

Congrats on the transaction. Wondering if you could talk a little bit about the confidence you have around Astria's early data set being relatively small in open label and what you anticipate to see in a Phase III profile? And if you think these impressive efficacy rates will stand up? Or is this going to be the longer duration driving adoption or if it's going to be a competitive profile. So, just if you could talk a little bit about what you want to see in a target product profile coming out of a Phase III trial?

Yes. Thanks, Jon. We're very impressed with the early data from Astria. And if you recall, going back to lanadelumab in the early days. Lanadelumab also showed very impressive early data in a Phase Ib study. So, there's a real analogue to what Astria shows. The difference being, of course, Navenibart has the 3- to 6-month dosing and greater than 90% attack reduction across both doses is very impressive to us.

So, where we think the need for efficacy in the market is largely met across the board. For some patients, if they don't get efficacy on one product, they have other options, which is great for patients and they move. But the market isn't looking for more efficacy. What it's looking for is less burdensome dosing. And that's what Navenibart has the potential to provide with every 3- to 6-month dosing. And what we've seen in our market research again is that, that 3-month profile with very low to no injection site pain is really something that gets patients' attention and we think is a tipping point to what will make them switch.

And Charlie, the projections you guys gave out today, is that assuming just that every 3-month works or that the 6-month works as well? Or is that an upside scenario to what you guys are thinking about?

No, it's really a blend of both, but 3 months alone is the really significant thing. 6 months is just icing on the cake.

The next question comes from Gena Wang with Barclays.

Also congrats on the deal. So, maybe two questions regarding -- one is, what will be additional clinical trial cost before the data readout in early 2027? And the second, when I look at the Phase III trial design, they do have three cohorts that was a placebo. So, total trial size is relatively small. Maybe if you can share a little bit of thoughts on the trial design. Is that any cohort positive approved or three cohorts versus placebo to be positive and that will claim positive outcome? So if you can share a little bit more color on the ALPHA orbit clinical trial design and maybe some assumption behind it?

Babar, do you want to take the first one on the cost, and Charlie, you take the trial design.

Yes. So, Gena, thanks for the question. So we have not -- we will not be naturally giving guidance as to the projections of the spend right now, because the transaction is still pending approvals. Once the transaction closes, we will be back and revise our operating guidance for 2026 when we are ready to do so. Having said that, as I said before as well, that with the divestiture of the European business, our stand-alone business is going to deliver strong operating profit growth. And even when we add the development spend, when we will guide you at the right time, you'll see our profitability will remain quite strong.

So, maybe I'll hand it to Charlie for the second question.

Sure. We think that the Astria team has been really smart in how they've designed this trial given the precedence in the HAE space, but also given the newness of every 3- to 6-month dosing. So based on the likely efficacy of this product, we think that all three cohorts are likely to show statistical significance. The key is just getting them all enrolled, and we think that the Astria team is off to a really good start on this.

The next question comes from Maurice Raycroft with Jefferies.

Congrats on the update. Maybe just a follow-up to just how you're thinking about the $1.8 billion assumptions there. In the past, you showed a Monte Carlo simulation with some projections for Navenibart, and it seems higher today. So, just what's changed since then for your projections? And how do you view the future breakdown in market share for both ORLADEYO and Navenibart?

Yes. So just to clarify, we are not giving projections on Navenibart. As we highlighted, that is based on a Wall Street consensus average number. But as we have said repeatedly that we feel very confident that ORLADEYO is on its path to $1 billion product. And with respect to the projections, yes, you're right. We do a highly, highly comprehensive market survey in terms of all the products and things. But I think, it's important to note what it does not tell you is the execution risk for some of these products. And that's where I think people underappreciate how difficult it is to commercialize a rare disease product and particularly in a space where there are many incumbents. And we have repeatedly shown that. We continue to show that.

So, that is why, I think, we feel so confident in terms of hitting that double-digit revenue growth on a going-forward basis when Navenibart -- when ORLADEYO starts to become a steady-state product.

And I'd just add to Babar's point about execution is, if this deal goes through, we have the better part of 3 years to prepare for the execution, and our team is ready for that.

Yes. Honestly, I would argue that there's no better team to launch this drug than BioCryst, right, with the experience that we've had with ORLADEYO.

The next question comes from Serge Belanger with Needham & Co.

This is John on for Serge today. Congrats on the acquisition. I just wanted to double-click on the commercial dynamics between ORLADEYO and Navenibart, that is if Navenibart is approved. Would you expect any potential pressure to ORLADEYO considering the improvements in dosing and the levels of efficacy that Navenibart could provide even considering the stickiness between the market segments? And then second, quickly, if you could provide any color on the IP landscape for Navenibart right now, that would be great.

Sure. Thanks, John. On the first question, with any pressure between the two, what we've shown repeatedly and described repeatedly is that, when patients start ORLADEYO, 60% of them make it to a year, because they're doing really well and very few of them drop off after that. So, we expect that dynamic to continue. We think the great opportunity potentially with Navenibart is those other 40% may choose to move over to an every 3- or 6-month dosing with Navenibart. So, we don't expect pressure on ORLADEYO. We expect that the two products can offer patients what they need in an oral or in an injectable setting. And as far as the IP landscape, we're very comfortable with their IP out to 2042.

And that was a key component in the diligence process.

The next question comes from Jessica Fye with JPMorgan.

Can you speak to your confidence that the FTC will be comfortable with this transaction?

Yes. We have no reason to believe that we won't be successful with the regulators, and there's tons of competitors in the market currently, and there's more coming. So very confident. Sorry, we lost you there, by the way.

This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

So, let me wrap up with this. We've been saying for a while that BD is a key component to our strategy. And as Babar said earlier, we've also been saying that the first deal needs to make a lot of sense. And so, good fit, high probability of success, right timing in terms of gap filler with our pipeline and then driving revenue growth into the next decade.

And today, I believe we've announced a deal that checks all those boxes. So as always, thank you for your interest in BioCryst. We look forward to continuing to keep you updated. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, everyone, and thanks so much for joining us for our next session. I'm Steve Seedhouse with the Cantor Biotech team. It's really a privilege to welcome our next participating company at the conference, BioCryst Pharmaceuticals. Thanks to everyone on the webcast and in the room for being here also.

And I'm joined on stage by CFO, Babar Ghias and President and CCO, excuse me. And I guess there's a lot of change in the title. So we'll say emerging CEO as well, Charlie Gayer. Thanks so much for being here. We would love to pass the mic over and just ask for an intro to BioCryst, current state of affairs, outlook for the rest of the year for some opening comments, and then we'll dive right into Q&A.

Sure. Thanks, Steve. We're really pleased to be here. Babar and I will be making some forward-looking statements. Those statements have risks. You can find those risks in our SEC filings at bioocryst.com.

BioCryst is in a really exciting place right now, and I'm excited to be taking over CEO in January because we have ORLADEYO, which is going to sell $580 million to $600 million globally this year and is growing at about a 20% CAGR. We are in the process of actually selling our European business, which will close early in October, and that's going to give us an opportunity. That's actually a business that, while commercially was going very well, was not profitable for us. And so the $250 million we get from that deal is going to allow us to really improve our balance sheet, and that creates more options for us.

We have an emerging pipeline that we're very excited about. We expect to have patient data later this year in -- first of all, in our BCX17725 in Netherton syndrome, a rare, very serious dermatological condition, and we think that has the potential to be another market like HAE. And then we've got our avoralstat product that we're testing for DME. And we think that there's a role for a kallikrein inhibitor in DME, and we'll have patient data as well at the end of this year. So we're set up very well, and we're excited.

Babar joined us earlier this summer as CFO and also the Head of Corporate Development. So another part that we're adding to our strategy is the ability to go out and look for incoming BD deals to add to our portfolio. So it's a very exciting time for us.

Yes. Maybe I would ask Babar, you can follow up with some comments because my next question was just on the timing of the management change and just both of your strategic outlook now on the new BioCryst. And certainly, the company has been sort of putting out the bad signal of interest in acquiring assets and being the consolidator of rare disease assets in the U.S. So I would love to get your perspective on just what the next 5 years of BioCryst are going to look like and what type of company and franchise you're looking to build?

Yes, absolutely. And I mean, if you look at it, our first pillar of strategy is do no harm to ORLADEYO. ORLADEYO is on a great trajectory. Pipeline is doing great early, and we're going to balance this out with more of like what's the in between. And what we'd ideally like to do is launch another product because of the great infrastructure that we have built.

And I think we can leverage a lot of that infrastructure. So we would be ideally looking to bring another product to the market over the next few years. So when you talk about the next 5 years, I think that's the perfect horizon for us before the end of the decade. ORLADEYO will still continue to grow, and we are able to bring out another product and then the pipeline can provide growth beyond this decade.

So I think that is another strategic priority for us, bringing something late-stage orphan, we continue to be an orphan disease-focused company and then naturally leveraging the infrastructure that we've put already on such a successful path, to use that with another product.

And Charlie, just maybe stylistically going forward, I mean, as you step in ultimately to the new role as CEO, anything that you would maybe guide investors to expect differently or anything that you would carry forward as what folks are familiar with BioCryst over the years?

Yes, I think there -- from the standpoint of what carries forward, as Babar was commenting on, ORLADEYO is going great. Like we have really shown that we can commercialize rare disease products extremely effectively. And we can figure out with products that others may not see the same opportunity, just like ORLADEYO. We saw something in ORLADEYO early on, and we were able to execute on that. So I think that is something that will continue, and we really want to double down on.

BioCryst, for all its existence, has been built on discovery and development of our own products. And we'll continue that. But what's great is we don't have to depend on that anymore because of what we've built with ORLADEYO. So I think it's a mix of what stays the same and continues, but then we're adding to it because we're in a stronger position.

Okay. Before I even get into some of the questions that I had written down, I wanted to follow up on just the EU business and the fact that, that wasn't profitable. I mean, is that a dynamic in HAE that holds for other regions beyond just Europe where it's just going to be very difficult for a BioCryst to turn profitability? Or what drove that relative to, obviously, a business that as we sit here today, is profitable in the U.S.?

Yes. What drove that? Our strategy was to continue to build and launch future products in Europe. We had Neopharmed Gentili, Italian company came to us with a really attractive offer. They wanted our team and our product to build a rare disease consolidator strategy in Europe. And the $250 million plus another $14 million in future milestones was just an offer that was really full value for the whole future of that business.

The European business was still attractive if you can add more products. It's expensive to run a business. And then obviously, the pricing isn't quite the same. So it was attractive, but not as attractive as the U.S. market. Other regions will -- it will vary. We still have our Japanese business, and we expect that to become profitable because we have good pricing there. But this just made sense for us right now, and it allows us to focus primarily on the U.S.

So ORLADEYO, you mentioned several times, and I agree, I mean, that the productivity and the growth there has been tremendous. But the market dynamics are shifting. There's a couple of new approvals in prophylaxis in ANDEMBRY and DAWNZERA. Just remind us sort of how you're viewing the impact of that competition, expectations you'd want to set and really any early impacts you might already be seeing in terms of switching or competition for new patients?

We've -- a part of our success, as I said, has been the deep research that we do. And so every year since before launch, we do a big study to do our best to forecast the future in the market. So we survey a large number of patients and physicians and payers and get their preference view on all current and future products. And then we run that through a big simulation model, and it's been very predictive of where ORLADEYO has grown to.

And what that model and the research tells us is these new injectable products, while it's great for patients to have new options, the -- going from a 2-week injection every 2 weeks to every 4 weeks isn't a big market changer for patients. And so we don't think it's going to have an impact on the trajectory of ORLADEYO because we have the most differentiated product with the only oral once-a-day prophylactic therapy out there.

And so what we expect is more of the continued growth. We actually think that competition is good because it creates more discussion around switching. And we know that most patients would actually prefer to be on an oral prophy if they could. So we think that competition actually creates some opportunities for us.

Interesting. So it's almost as if, "Hey, there's these new therapeutic options for you. But by the way, have you considered ORLADEYO?"

You should -- if you haven't done this already, you should try this now. If it works for you, you should expect fantastic efficacy. If it doesn't work for you, then you have other options you can move on to. So that is an effective story for us.

I mean the other dynamic I think it would be worth commenting on there would be the availability now of an oral on-demand therapy and act early. And for the first time now, a patient would have the option of oral ORLADEYO, oral on-demand therapy, no injections in their life in theory. Are you expecting a positive tailwind from that? Have you seen any early indication of people moving to the oral oral?

It's too early to comment on exactly what's happening. We've heard physicians though, they come up with what they say is, "Oh, I get it, all oral combinations will be great for patients." So we do think it has the potential to be a tailwind. I think it's going to take several quarters to see if that's the case. But it could be something that attracts more patients to ORLADEYO. And it could also be something that helps more patients stay on ORLADEYO if they do -- are able to treat breakthrough attacks with an oral on-demand therapy. So we think it's -- again, it's great for patients.

Do you have real-time insight into if a patient switches from ORLADEYO to ANDEMBRY or one of these new launches? Can you see that happening? And have there been any -- if you can, have there been any patients that have actually made that switch?

I'm sure there have been. So yes, we do. We get pretty good information when a patient switches if they tell us where they go. In the past, as you can imagine, the majority of switches were to TAKHZYRO, the market leader. So I think what will happen is some of those switches will now go to ANDEMBRY. If ORLADEYO doesn't work for you, that's natural. We don't expect it to change our trajectory, but I'm sure we'll lose patients.

Just divide...

Generally to DAWNZERA, yes, that's to be expected. Nothing to worry about, very standard.

Okay. And I mean, given this franchise that you've built in ORLADEYO, I mean, what is the line extension strategy? I mean how can you protect this potentially $1 billion franchises you're expecting?

One -- we do this in a couple of ways. One is that we generate a lot of real-world evidence. Part of this has been one of our real competitive advantages in our sole-source model. We are able to collect information from patients on a monthly basis about their attack rates when they start ORLADEYO, what's their ongoing attack rate. And then we're able to bring that out to the market, to physicians to educate them about the efficacy of ORLADEYO. And that's really led to more confidence in the product amongst prescribers. So we're going to keep doing more of that.

The other thing we're very excited about is the pediatric indication with ORLADEYO granules. We have a PDUFA date, December 12. And that has the potential to open up the age 2 to under 12 market for us. And we think there are a lot more of those kids that actually could benefit from a prophylaxis therapy than has been understood in the past and an oral product clearly is an advantage. And it's -- for the most part, it's a family disease. It's a genetic disease. So in a household, you're going to have mom or dad usually on some prophylactic therapy, kid on a prophylactic therapy. So it's another way to introduce ORLADEYO to a broader audience.

I guess I was thinking about it more from the standpoint of -- presumably, you're not just going to ride out the market exclusivity for ORLADEYO and then you're no longer involved in HAE. I mean you've built this expertise, you've built this leadership position. I've been surprised that there hasn't been more innovation behind ORLADEYO on the oral side in HAE.

I mean there's one asset that's coming up on Phase III data. But beyond that, it's gene editing and it's RNAi. And so that seems like an opportunity maybe to build the next generation or acquisitively just protect the franchise, right? Maybe think about combo therapy. So how are you thinking about that launch?

Yes. So first of all, ORLADEYO has really strong patent protection. So we have composition of matter on the base until 2035, on the salt until 2039. So what we see happening is we'll actually reach peak of $1 billion in global sales around the end of this decade, and then we have the potential to maintain that for the better part of a decade. Developing oral drugs for HAE is difficult. There are many companies that have failed, including ourselves, our first-generation product failed.

And so what we've decided is the best use of our resources is keep investing in what we're doing with ORLADEYO, but then as Babar was talking about, bring in other products to build our portfolio from outside, and then we'll keep building from inside as well.

How has net pricing been evolving? And any expectation that, that would change with sort of this boom of prophylaxis options?

We're -- I think we're in really good shape this year. Our gross to net is about 15% off of -- for paid patients off of list price. We think that we're in a very good spot because now we have 1,500-plus patients on ORLADEYO. So payers view us -- view ORLADEYO very differently from how they viewed ORLADEYO 5 years ago. And so from a market access, a pricing perspective, we feel like we're in very good shape.

Okay. Moving on to the pipeline, then we would love to cover some of those exciting programs. So Netherton, first of all, rare disease. Looks -- I can hardly look at the pictures. I mean, super debilitating for these young children and resolved, I guess, or improved somewhat over time, but certainly for those kids, I mean, there's a huge unmet need here.

So can you talk about your program? Just how many dose cohorts are you sort of studying early on, the type of patients you're enrolling and the data that you anticipate generating this year and into next?

Yes. So for those who aren't familiar with Netherton syndrome, it's kind of a classic rare disease where there's a genetic mutation that causes patients not to have a key regulatory protein that controls skin turnover. So basically, for a normal adult, your skin will turn over every 4 to 6 weeks. For Netherton's patients, it's more like every 2 weeks. And so there's constant body-wide skin peeling, redness, itchiness, puts patients at a greater risk of infection, other like atopic conditions, so asthma, food allergies are common.

And like you mentioned, for kids with this, kids skin turns over even faster. So for young children, it can actually be life-threatening. For adults, it's just very debilitating over time. Our drug replaces that missing protein. So we think we have the potential for an every 2-week injection that can restore normal skin turnover.

So where we're at, we've done healthy volunteers, SAD and MAD. We haven't released that data yet, but we're starting into Part 3 and then Part 4 of our study. Part 3 is going to be a small number, about 6 patients, Netherton's patients studied for 4 weeks. So they'll get 3 doses over a 4-week period, and then we'll track them over time after that. And then Part 4 will be a 12-week study.

What we expect to have at the end of this year is probably less than a handful of patients from the Part 3 of the study where we'll be looking for evidence that the drug is getting where it needs to get to, which is in the epidermis and that it is binding to the uncontrolled KLK5 that the normal SPINK5 protein would be controlling. That's what our drug will hopefully be controlling.

So we'll look to see if we're getting the drug to the skin, and then we'll look for early signs of improvement in skin turnover. With the Part 4, we should be able to see within a few months, our patients having more normal skin turnover restored.

And then my understanding is you can -- those PD readouts in terms of on-target activity, you could do that by sort of the shedding of the skin.

That's right. There's 2 ways. We'll be getting skin biopsies and then also skin stripping. So basically like a tape where you take off the top layer and then you can test to see if the drug is getting in there. And importantly, is the PD effect there? Is it binding with KLK5. And so those are the data in addition to, of course, safety data and general PK data that you should expect at the end of this year.

How well understood is the regulatory path here? Would you be laying that path and...

It's -- there's never been a drug approved for Netherton syndrome. There are other rare disease products that have been approved on similar types of physician and patient-reported scales of improvement. And so we will -- as we get this patient data, we'll be having more conversations with the FDA about that regulatory path.

What we do believe is that this has the potential to be a very small pivotal study if we show that strong effect. It's all going to be about the effect size that we see. And so we're hopeful this is a program that can move pretty quickly. The patient need is certainly there.

Okay. Moving to DME, which is another very interesting program and data that would be forthcoming. What magnitude of -- I guess, retinal thickness here would be the key efficacy endpoint to look for? What are you hoping to show in terms of magnitude of effect in this study?

So for this, it's -- we're doing the SAD study in DME patients. So in this case, one dose with avoralstat -- avoralstat delivered suprachoroidally. So avoralstat was our original HAE drug. It was a terrible oral drug, but actually, we think the properties that made it bad at being an oral drug make it perfect to sit at the back of the eye, dissolve very slowly and inhibit kallikrein that we think is an alternative path to swelling in DME.

So in this first study, what we'll be looking for in addition to safety is, are we reducing central subfield thickness. We'll be looking for an effect of probably 50 to 70 microns reduction. And then very importantly, what is the durability of that effect. And so we'll be following patients to 3, 6 months and beyond to see is that swelling reduced? And then is it -- does it have the potential to be in every 6-month injection.

We'll, of course, collect visual acuity as well, but we're only talking about 9 patients in this first study with 3 dose cohorts. And so we -- I wouldn't expect a lot on the visual acuity side.

How -- so in those 3 dose cohorts, how confident are you in the dose selection here and your ability to hone in on an active dose, particularly because the delivery approach here is novel for the indication. It's been used elsewhere. But are you able to triangulate that device? You have experience with the molecule in HAE, the disease? How does that all fold together?

So yes, we have a lot of safety information on the molecule. So that's good. It's been studied systemically. What we'll be looking for is, yes, again, does the drug have an effect for long enough? We saw great effect and durability of effect in animal models. So we're optimistic from that study.

Remind us, was that with the same injection...

That was with suprachoroidal. So in rabbits, we see that it's actually maintained past 6 months. And you can do it in rabbits because of their larger eyes. We have to prove that in patients as well. We think that the 3 doses could show the effect. And if not, we have the opportunity to go to cohorts higher than the 3 doses.

Okay. Babar, just maybe to bring you back in here, and this is a conversation that I really want to have with you both, which is the strategic outlook and just this messaging that we talked about at the start of the conversation of consolidating rare disease assets and building on what you already have with ORLADEYO. I guess first question is what therapeutic areas are of interest to you?

Yes. No. And I think as we mentioned earlier as well that the priority #1 is to make sure that we stay in rare diseases and leverage the infrastructure that we've built. So we're not trying to fill up a bag, let's say, for our current sales force team.

So naturally speaking, allergy immunology call point is of great strategic interest to us. But beyond that, when we think about rare diseases, we have a program in Netherton syndrome. So that opens up to rare derm indication and derm specialty. But as you go along the sort of broader rare diseases, we are not going to be a solution for every rare disease, but something that has the characteristics of more like HAE, where there's a patient population of, let's say, 10,000 addressable patients where you can approach it with a single-source pharmacy, leverage a lot of the infrastructure.

And when I say infrastructure, building a sales force team, we have 40 sales reps. It's not a large encumbrance, right? It's the infrastructure that we have built, the patient services, the market access, the HEOR, all the systems that we build, that's an investment that is plug-and-play for any new opportunity we bring in. So the incremental investment for any therapeutic area is very minimal compared to what, let's say, starting to build a new team altogether. So I think like some of these allergy immunology areas of great interest, rare derm, metabolic diseases, anything where we can actually create -- to use that infrastructure and create a lot of leverage.

Indeed. And in stage of development, I think you said that you're leaning towards late stage, but maybe just characterize that for us. What do you think of now and...

Yes. And again, to your point in terms of the defensive strategy, we'd like to bring a product in the next 2, 3 years and certainly in this decade to basically continue to grow our business. So that puts us in more of a later-stage spectrum. Our pipeline is early, and that will continue to bring sort of points on the board if it progresses well like on the later part or early into the next decade.

But there's a convergence at some point of doing deals and bringing your internal pipeline that they're basically -- so the first deal has to be very strategic for us and has to tick a lot of boxes in terms of are there synergies with our system? Are we able to commercialize it? Can we make an impact over there? So naturally speaking, our focus in the nearer term will be on later stage and then that opens up the risk appetite for follow-on deals where we can take a little bit more risk.

Okay. And in terms of where the rubber meets the road here ultimately, I mean, what -- how large of a deal can BioCryst do and what structures of a deal are you open to? And has that changed from 6 months ago, 12 months ago? I mean, where are you at today? And just help us understand where you've come from because I think you've been in the market, I think, and interested in this strategically for some time, but certainly now at a different scale and the company is profitable and you're at a different place.

Yes. Let me address the sort of scale perspective question first. And the affordability and the scale question is along 2 parameters, right? A, it's what are the business fundamentals for us. And now as we've shared with you, when the European transaction closes, we haven't naturally guided to for next year yet, but that allows us the ability to clean up the balance sheet, but also, we will have significantly improved margins. We are losing $50 million, but we're losing more than that.

So I think our profitability over the coming years is going to continue to grow. And then because of that, the cash flow generation will be significantly stronger compared to prior years.

The second thing is in terms of like what's the asset profile that we're going after, if it's a later-stage asset and has a higher addressable market, naturally, it will come with a price tag that has to be sort of taken into consideration. Now that being said, we will continue to be very capital disciplined. Just because we are generating cash, it doesn't mean we're going to bet the farm and basically recklessly going to spend. I think it has to be very strategic. So our Board will -- we will work with our Board in terms of making sure what it does for the business.

Now naturally speaking, something that is truly transformative, that's in a totally different ZIP code. So I think our first deal has to make a lot of sense so that investors can also understand that like, yes, this is a natural extension of the strategy.

To your point in terms of structures, I think at this point, it's a great environment. There's a lot of opportunities out there, and you can structure it in various different ways, whether it's staged asset deals or licenses or company acquisitions. I think all of those options are on the table at the moment. And it is a market where there's a lot of willing sellers as well because of the dislocation of capital, whether it's public or private for these biotech companies.

I was just going to emphasize one thing that Babar said, like in the commercial infrastructure, it goes beyond just straight commercial, too. I mean you need more finance people when you're a commercial company than you do when you're just an R&D company.

You need a lot of other functions and BioCryst has built that. And I think the current environment for R&D companies who have their first lead asset, maybe getting in that commercialization zone, they have to decide, are they really going to invest in everything that it takes? Or does it make more sense with a company like BioCryst? And we think there are a lot more opportunities out there than perhaps are sometimes realized both in public and in private companies right now.

How -- maybe I'll just ask directly to the extent you can answer, I mean, how advanced are sort of ongoing conversations and how willing are sellers in this market, either on the public or the private side? And just what are you seeing in the market right now?

So on the willingness, very high willingness. Naturally, there are companies -- and again, this goes back to the point, even if you're a -- let me just address, even if you're a public company in Phase III, but you are sort of, let's say, a year or so away from an inflection point, you need to be spending that capital right now. And I don't think many companies in the market right now are willing to -- or the Boards are saying that go spend capital or go raise another equity round to be able to spend on commercial.

So I think that creates a natural opportunity and launching a drug -- getting a drug approved is great and launching a drug is also a very challenging aspect in terms of the investment that requires. So I think we find ourselves in that point where a lot of these public companies as well are willing to talk where historically they weren't because that inflection point is at least 12 to 18 months away, and they still need that capital. So I think that creates one opportunity.

The second thing is also private companies. And private markets are even more dislocated in that sense that venture funds are not necessarily doing that aggressively the top-up rounds because the step-ups have not been there and the public markets are not there. So that kind of creates that sort of -- that cycle of like, "Hey, seek partnerships, seek M&A, seek other alternatives to capital where ventures dollars do not have to go in and you can get a mark on that investment." So I think that sort of appetite we're seeing has increased both from the public and the private side.

The other thing that is like because of confidentiality, we naturally cannot say how advanced or whatnot. But I think suffice it to say that it is really a buyer's market if you have that infrastructure and you are not dependent on just like raising capital to do a PD deal.

I mean it's consistent with what I think all of our in the room intuitions are in this market right now, but it's good to hear somebody who's out there having these conversations that, that is, in fact, what the reality is on the ground. Maybe I just wanted to also ask, and again, if this -- if you can't comment, it's okay, but I'll try anyway.

I think you said publicly, I mean, with the money from the EU asset sale, you'll clear off the debt from the balance sheet. And -- but presumably, you could use leverage, there would be debt available on better terms than maybe that. Synthetic royalty on ORLADEYO maybe is something that you could think about in terms of financing a deal or just cash on the balance sheet, right, given the profitability -- would any -- would you -- and then, of course, some stock transactions. Like would you exclude any of those ways of financing a deal? Or is everything on the table?

I think I would say anything and everything is on the table for the right type of deal. Naturally, every CEO, every CFO says my stock is undervalued. So there's a natural inclination that what am I using my stock for. But to your point on debt, historically, there were certain avenues of capital like bank debt or term loan markets because we did not have EBITDA. We're getting to that point where basically we'll have last 12 months look on like EBITDA.

So I think that opens up plenty more avenues of capital. And the fact that I mentioned that we will have significantly improved business fundamentals because of the divestiture and the ramp of ORLADEYO that it gives us a big margin in terms of absorbing new opportunities and still remain -- maintain our profitability and cash flow generation.

Well, it's obviously an exciting time for the company. We're looking forward to seeing anything that manifests there. And of course, your pipeline readouts and the continued progress of ORLADEYO. And I just want to thank Babar and Charlie for joining me on stage here. Thanks to everyone for listening on the webcast and in the room. And hopefully, everyone has a great rest of the day at the conference.

Thanks, Steve.

Thanks for having us.

Good day, and welcome to the BioCryst Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Bluth. Please go ahead.

Thank you very much. Good morning, and welcome to BioCryst's Second Quarter 2025 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; President and Chief Commercial Officer, Charlie Gayer; Chief R&D Officer, Dr. Helen Thackray; Chief Medical Officer, Dr. Donald Fong; and our new Chief Financial Officer, Babar Ghias. Following our remarks, we will answer your questions.

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.

In addition, today's conference call includes non-GAAP financial measures. For a reconciliation of these non-GAAP measures against the most directly comparable GAAP financial measure, please refer to the earnings press release posted in the Press Releases section of our Investor Relations website at www.biocryst.com. I'd now like to turn the call over to Jon Stonehouse.

Thanks, John. Q2 was another outstanding quarter of performance for BioCryst. For ORLADEYO, it was the best quarter since approval, both from a revenue and underlying new patient demand perspective. To be in the fifth year of the launch and growing so sustainably quarter after quarter is a result of great execution by the team and continued growing confidence in the product. The commercial team at BioCryst has learned so much in the marketplace and made adjustments along the way that has kept this growth sustainable. Our recipe for success has been combining talented, motivated people, data and insights to very acutely understand the market and our customers and focused execution.

We show up differently than our competition. I know this as I saw it recently at the U.S. HAE Patient Summit, a gathering of over 1,000 patients and their families and many leading KOLs. They shared with me and other members of our team the growing confidence they have in our product. Many made the effort to seek us out and describe how ORLADEYO has changed their lives. This underscores when the product works for a patient, it works very well, and the number of patients experiencing both efficacy and convenience continues to grow steadily. There is little doubt that we are on a path to $1 billion at peak and market leadership with ORLADEYO. But to create even greater value, we need to do it again with another product. It's clear that we must source our pipeline through both internal research and BD. Our Netherton syndrome and DME pipeline programs remain on track to have some data by the end of the year.

We also signed a definitive agreement to sell our European business to Neopharmed Gentili or NG, and we are working hard to complete all the necessary steps to close the deal in early October. This deal puts us in such a strong financial position, enabling us to pay off our term debt while generating an increasing operating profit margin. We believe it puts us on a path to generate more and more cash flow and that we will remain on this path through the rest of the decade and beyond. Pipeline progress and financial flexibility enable us to continue to advance our pipeline while looking for assets from other rare disease companies. We have built an outstanding commercial capability at BioCryst, and we plan to leverage it over time by bringing multiple products to the market to create greater and greater value. Before I turn the call over to Charlie, I want to say how excited I am to see the company move to the next stage of growth, call it BioCryst 2.0.

Charlie has built one of the most successful rare disease commercial engines ever, and now we are able to leverage this engine to become the consolidator of rare disease assets. We have built a great reputation through a track record of success, and now we have the financial strength to execute this strategy. So it's time to change the leadership to execute the strategy and take the company to the next phase. After an extensive succession planning process assessing both internal and external candidates, it's great to have our Board unanimously choose Charlie as our next CEO. I've seen Charlie grow as a leader for almost a decade now, and he has earned the job as the next CEO, and he is ready to lead the company. I look forward to working with Charlie and the team in these remaining months to make this a smooth transition into the new year. With that, I will turn it over to Charlie.

Thank you, Jon. It's an incredible honor to be chosen to lead this company, and it is not lost on me that I would not be in this position nor would BioCryst have reached this exciting point without your leadership. And thanks to all our colleagues who work so hard every day to bring transformative therapies like ORLADEYO to patients. You are making a big difference, and we are just getting started. And what a start it has been for ORLADEYO. We are halfway through year 5 since launch, and ORLADEYO continues to build momentum that is reaching a new level. The second quarter was the best ever for the U.S. with new patient prescriptions up over 10% above the first quarter of the launch in 2021 and over 15% above Q1 this year.

ORLADEYO revenue greatly exceeded our expectations, over $22 million above Q1 and 45% growth year-over-year, and it did so for several reasons. The spike in new patient demand, further efficiency in getting paid shipments, lower discontinuations during the first half of 2025 compared to last year, gross to net improvements and strong international results all contributed in roughly equal parts to generate the overperformance. Each of these factors was a direct result of our team's continued focus on execution. With this strong second quarter, we are confident that we will reach the upper half of our revenue guidance of $580 million to $600 million for the full year, even after removing fourth quarter European revenue after closing the sale of our European business, which we anticipate in early October. We expect to provide more detailed guidance on the go-forward BioCryst business at our third quarter earnings call in November.

The spike in demand was only one component of the surge in revenue in Q2, but the prescription trend bodes particularly well for long-term growth. We saw an uptick in new U.S. prescribers with 69 compared to 59 in Q1, and existing prescribers continue to prescribe ORLADEYO to more of their patients. A big factor in the jump is the confidence physicians gain when they see our large volume of real-world evidence. For example, we recently released data showing that a large cohort of HAE patients with normal C1 inhibitor experienced substantial reduction in attack rates after starting ORLADEYO. This analysis of over 350 patients tracked for up to 18 months is helping physicians offer new hope for a segment of the HAE community that has struggled to get effective care for years.

There was a lot of excitement at the recent HAEA Summit because diagnosis and treatment of HAE with normal C1 inhibitor was a major part of the agenda as presenters described new consensus guidelines that were created in partnership with the patient community. U.S. payers reimburse ORLADEYO for normal C1 at a rate about 10% less than for type 1 and 2 patients, but our evidence generation and the expert consensus statements are helping to close that gap. Strong and consistent demand from type 1 and 2 patients, the increasing demand from patients with normal C1 inhibitor and the future pediatric demand from the anticipated FDA approval of ORLADEYO granules in December set us up to continue revenue growth momentum into 2026 and beyond. I'll turn it back to Jon in his role as acting CFO for the second quarter to review the financials.

Thank you, Charlie. To make such positive and significant strides commercially while advancing our pipeline during the quarter is great to see. To be able to achieve all of that while continuing to improve our already strong financial position makes it even better. So let me walk you through the financials. While you can find the detailed second quarter financials in today's press release, I'd like to draw your attention to a few items. Total revenue for the quarter came in at $163.4 million, $156.8 million of which came from ORLADEYO. Of that ORLADEYO revenue, $140.3 million or almost 90% was generated in the U.S.

For ORLADEYO revenue, that represents 45% growth in quarterly revenue over the same quarter last year. Non-GAAP operating expenses, excluding stock-based comp and deal-related costs were $106.4 million for the second quarter of 2025, up from $87.4 million in Q2 of 2024. Based on the investments we've made in the past, we've started to see strong operating leverage in our business. As you would expect, some of this increase was driven by continued investment in our R&D programs and details on expense drivers can be found in our press release. Non-GAAP operating profit for the quarter, excluding stock comp and deal-related costs, was $57 million, and our non-GAAP net income for the quarter was $32.3 million, resulting in a non-GAAP EPS of $0.15.

We generated $45 million of cash in the second quarter before any debt prepayment. Based on the continued strength in our cash position, we paid down $75 million in principal from our term loan in April and an additional $50 million in July. This reduces the balance of our term debt to $199 million, and our intent is to pay it off in full upon closing the sale of the European business in early October. The cumulative effect of these prepayments enables approximately $90 million of net interest savings over the life of the loan. Our accelerating cash flow generation enables us to reach an expected $700 million in cash by 2027. However, we don't plan to sit on the cash, but to actively deploy it into value-creating opportunities. This strong financial performance alone represents great progress for the company. But to pair it with the commercial team firing on all cylinders and the great progress that we have made advancing our pipeline, it's even more remarkable.

This was a great quarter to conclude my brief stint as acting CFO, and I'm delighted to welcome Babar Ghias to the team as our new CFO. Babar's extensive deal-making and operational experience in addition to his previous roles as CFO at rare disease companies are exactly what we need at this time as we look to deploy capital and accelerate our path to sustainable growth and increasing value. I've been impressed with how quickly he's gotten up to speed and integrated with the team. The growing financial strength of the business and the inorganic opportunities available present exciting prospects for BioCryst 2.0. With that, I will turn it over to Babar.

Thank you, Jon. To have achieved such a strong quarter and great progress in the last few months during your tenure as interim CFO is a testament to the amazing finance team that we have here at BioCryst. Their positive attitude and desire to make this company better have been evident to me immediately, and I'm excited to work with them. I am honored to be joining the BioCryst team at such a pivotal point for the company. The continued strength of ORLADEYO and the recently announced European business sale creates several value-enhancing options for BioCryst. It enables us to streamline our operating structure upon completion, improving our overall profit margins.

Our plan to pay down our outstanding debt will further boost earnings from future interest expense savings. And most importantly, our strong cash flow profile, combined with an unlevered balance sheet going forward, provides us the ability to deploy capital in building sustainable shareholder value, whether it's in-licensing pipeline programs, product or company acquisitions or even return of capital to shareholders in the future. This next journey of BioCryst is going to be a very exciting one, and it's great to be here. Operator, we'll now open the call for Q&A.

[Operator Instructions] Our first question comes from Jessica Fye with JPMorgan.

This is [indiscernible] on for Jess. Congrats, Jon, on your upcoming retirement, Charlie and Barbara on the new roles. I just have 2 quick questions. So first, of the 45% year-over-year ORLADEYO net rev growth, how much of that was volume and how much was better paid rate or net price? And then you mentioned an improved discontinuation rate for first half '25 than first half '24. What are the numbers you're seeing there? And what do you think is driving that? And should we expect the trend to continue and why?

Yes. So for the growth in Q2, as I said in my prepared comments, it was a mix of everything from volume. There was some gross to net improvement. We were also just more efficient in squeezing out more paid shipments during the quarter. So it was a big mix of everything. But what I'm really excited about is the fact that the demand was so high because that's what's going to drive the long-term growth. And it's -- it was better than ever. And sorry, the second part of the question, can you repeat that part?

The second question or the second part of the first question?

Sorry, the second question.

Yes. So you mentioned an improved discontinuation rate for the first half of '25. What numbers are driving that there? And do you expect to continue that?

So what we've seen over the last several years, and it's true in the first half of this year as well is that the 1-year discontinuation rate has been rock solid. So 60% of patients who start make it to a year. That really hasn't shifted. Where I think we've seen a little bit of an improvement as our patient base grows, the overall discontinuation rate is trending slightly down because patients who make it to a year, they're doing really well, they stay on therapy. And so it's exactly what you want to see, and I would expect to see this kind of same solid discontinuation or retention rate going forward.

Our next question comes from Laura Chico with Wedbush Securities.

My congrats to John, Charlie, Babar. So I guess I had just one -- your comments on discontinuation rates made us a little curious here. Could you speak a little bit to persistency rates in relationship to other injectable prophylactic regimens? And I realize there's probably no direct head-to-head studies, but wondering if you can comment here on any real-world data just that puts into context the persistency you're now seeing with ORLADEYO versus the injectable products.

Yes. Thanks, Laura. We actually put out some data at a recent conference. I think it was last fall at the college meeting. We looked at health care claims data for both ORLADEYO for TAKHZYRO and HAEGARDA and looked at patients starting any of those 3 products. and looked at the 1-year persistence rate. And the 1-year rate is statistically identical for all of them, around 60%. Numerically, actually, ORLADEYO was a little bit better than the other 2. And so I think what that shows to us is no single HAE therapy is perfect for every patient. And we know that about 70% of patients would prefer to treat with an oral prophy product. So it shows that ORLADEYO has got the profile that patients want and performs really well in the real world.

Our next question comes from Steve Seedhouse with Cantor.

Congratulations, Jon, Charlie, Babar, really everyone on the quarter as well. Two questions. First, any early indications of how the June and July approvals in HAE, so garadacimab and Ekterly are affecting ORLADEYO demand over the past month? And also, any additional color you can provide on the pediatric PDUFA delay just to give us comfort there.

Sure. On the new approvals, we just had by a substantial margin, the most new patient prescriptions ever. So what it shows is physicians aren't waiting for any of these new products, which is exactly what our long-term market research has shown. ORLADEYO is the most differentiated prophy in the market, and I expect our demand to continue.

Yes. I think it's important, too, to remember that we've told you patients don't see their doctor much more than once or twice a year. So if they were going to have that conversation, they would have it set up, and we're not seeing that. So I think that's at least an early good sign for us. Do you want to take the pediatric?

Yes. And the question on the pediatric and the PDUFA date. So the FDA upon receiving some final reports and some responses that we gave them decided that they needed a little more time to review. So that's a major amendment to the NDA, and that leads us to the PDUFA date of December 12. So we're on track for that.

Yes. And we knew when we submitted the original filing that we had these reports that we had to get in. If we had waited for those, we would have virtually the same PDUFA date. So we thought we would take a shot at that. And we're excited. The key is we're going to get approval this year, and we're excited about that. So...

Our next question is from Tazeen Ahmad with Bank of America.

Congrats on a great quarter once again. I just wanted to maybe get a little bit of color on what you think your penetration rate is into the addressable market today? And where are you seeing most of your use? Is it more from doctors who've tried ORLADEYO, like the results and keep prescribing it? Or are you seeing an acceleration of new doctors coming on board to write scripts for the first time?

Charlie, you might want to talk too about pace because I think that's an important piece that people might not understand.

Yes. Tazeen, from a penetration rate perspective, we've noted before at the end of 2024, about 3,000 patients had already tried ORLADEYO, roughly half of those are still on therapy. And recall that we've also put out data that there are about 11,000 diagnosed patients in the market. So we still have a lot of upside growth remaining. As far as health care providers, I was really thrilled that we had 69 new prescribers in Q2 this late in the launch. It shows that we keep finding and convincing more doctors. And the overall split of prescriptions tends to still be about 50-50 with about half of them being from Tier 1 physicians, the top 600 roughly that treat half the patients in the market. And then the other half comes from the wider base of other physicians who have just a few patients.

And what we're seeing overall, and Jon mentioned this in his comments, I alluded to this as well is there's just more confidence amongst physicians in the long-term data that they're seeing the data that we present to them and then also what they experience themselves. And so they're really thinking about ORLADEYO very differently than they were a few years ago, and they have confidence in putting switching patients, which is still roughly 50% of the patients. They're confident in putting acute-only patients having them come over to prophy, start with ORLADEYO. And then patients naive to therapy as well. When they start on a prophy, ORLADEYO is the natural place. So we're capturing all the segments.

Charlie spent a bit of time in his prepared remarks talking about normal C1 patients, and that is a real opportunity for us, a place that historically physicians have not had great success in either diagnosing or treating. And we've generated data, meaningful data, 350 patients worth of real-world evidence showing pretty amazing reductions in baseline attack rates on ORLADEYO with these patients. So those are examples of areas that the team just keeps scouring and finding, and that's why you keep seeing this sustainable growth.

And then just maybe to follow up, are you expecting that stickiness topic that has come up on several calls to continue as you add new patients, how reliable do you think they'll be to stay on therapy if new potential -- new oral competitors come online.

Sure. No, I think extremely sticky. You either do great on ORLADEYO and you stay on or you don't and you move off. So I don't think patients are not waiting for some hypothetical future oral product. They'll switch today. They've got a lot of good injectable options. If they don't get what they need from ORLADEYO, they'll switch. And so I think the patients that stay are very sticky.

Yes. And the last thing I'd say is what would be better than a once-a-day highly effective drug, right? Like what behind us is coming that is better. There really isn't a profile that's better. So we expect it to be very sticky, as Charlie said.

Our next question is from Gena Wang with Barclays.

Also congrats on the strong quarter. So maybe Charlie and the team, if you can give a little bit more color regarding the launch metrics in 2Q regarding the reimbursement product rate, I think the last quarter was at 84%. And retention rate, I just want to confirm, is that consistent, stay at 60%? And if you can provide any other metrics regarding the patient segment.

And then second question is regarding the timing for the 2 pipeline assets. I know you said that by the end of -- by year-end '25 for 2 pipeline assets. Maybe any additional color you can share regarding the patient enrollment and expectation for the data. Lastly, very quickly, I just wanted to ask, Jon, I know it's -- it has been great working with you. And I'm just wondering what's the reason regarding the timing for transition to the next journey of your life?

Great. Charlie, do you want to take the first one?

Sure, Gena. As far as the launch metrics, I mentioned in my prepared remarks that we were able to -- part of the overperformance in the quarter is we got more paid shipments out of our patient population than we have historically on a trend rate. So that was part of the overperformance. The actual paid rate is doing exactly what I predicted last quarter, which is we reached a high watermark around the April, May time frame when we come off of the reimbursement -- sorry, the reauthorization season. And then for the rest of the year, the paid rate tends to be dominated by new patients coming in.

What that means is it drifts down slightly over the course of the year by -- we would expect it to go a percentage or 2 down by the end of the year, and we're on that trend. So we feel really good about where we are. Then next year, we'll recover that and probably take the reimbursement rate to a new high. As far as retention, as I mentioned in the last question, it's been really solid. So that 1-year 60% retention rate has been consistent for the last roughly 3 years. And it's because patients they -- as I said, they either do really well and they stay on or they move on to a different product.

And then with regard to the pipeline question, so we have 2 programs in the pipeline, both in the clinic that we're progressing with data anticipated by the end of the year. They're both progressing well on track for Netherton syndrome, our program is 17725, for which data this year will be both on exposure, the penetration of the drug in the skin and on potential efficacy endpoints, including itching and healing of the skin. So we anticipate having initial data for that drug for those endpoints by the end of the year. For avoralstat this is a trial in patients where one dose will give sustained exposure.

We expect to have exposure over months. And so what we'll be looking for is how patients do once they've had that single dose. This is treating for DME. So we'll be looking for effect on the retina and the potential for reducing the swelling in the retina. And as I said, its exposure over months, but we'll be looking at 4 weeks, 8 weeks, 12 weeks in. So that initial data will be coming this year, too.

Great. And then in terms of timing for me, Gena, thank you, by the way. It's been great working with you as well. It's time. I don't know how else to say it. I turned 65 this year. I've been in the company. It will be nearly 19 years when I leave. The company is in great shape. The Board and I have been working on this succession for over a couple of years, and Charlie is a great choice. So it all just kind of lined up, and it's just perfect timing. So that's my answer.

Our next question is from the line of Stacy Ku with TD Cowen.

A quick congratulations to both Jon and Charlie on the announcements. You both have done amazing things together with the BioCryst team. So a few questions. One quick follow-up. Just longer term, maybe remind us how you're thinking about the on-demand launch of oral Ekterly as we think about -- as we always had thought that would be a benefit for you all. So just help us understand, is the sales force able to maybe regrab share with patients that had to go back on injectables with ORLADEYO? Is that low-hanging fruit? And then from a payer perspective, how are they going to handle all this? So just maybe some more details there as we've been getting some investor questions.

And then second, a little bit of just a double checking here. As we think about the paid shipments in Q2, just want to understand, is there any implications on a quarterly basis, something that has come up with other companies. I just want to make sure there's no changes to the normal quarterly cadence? And then last, we see the IND approval by the FDA for Netherton. So congratulations there. As we await data, just remind us the current competitive landscape there and what kind of learnings you are taking?

Sure. Thanks, Stacy. As far as the role of Ekterly, yes, we think patients are really excited. The ability to ultimately have an all-oral combination where you take an oral prophy and then when you have an occasional breakthrough attack, be able to treat it with an oral as well. It just adds to the convenience and for patients just being able to worry less and kind of forget that they have HAE. We saw that excitement at the HAE Summit last month. And so we do think it has -- there's a potential positive upside both in terms of attracting patients to ORLADEYO and for patient retention if they're also taking -- or using an oral on demand.

What we definitely know from speaking to patients and physicians in large numbers is prophy is still the backbone of therapy that they're looking for and in particular, oral prophy. As far as paid ships in Q2, no, nothing that we're seeing out of the ordinary. The improvements that we're seeing is just about our team's execution. And then I would expect for the rest of the year a similar quarterly cadence to what we saw last year, where the revenue growth slows down a bit relative to Q2 because we're out of the reauthorization season. And so I would expect it to look quite similar with Q3 and Q4 growing according to our new patient demand.

And then with regard to the competitive landscape, I mean, it's always hard to say stuff with any certainty. But Daiichi, we haven't heard boo from their program in almost 2 years. And so that's probably not a good sign. And we've heard that for business reasons, they've terminated. We don't know if that's true or not, we've heard that. And then BI had a program that I think they out-licensed or sold to a company. Usually, you don't sell an asset if you have a lot of value and confidence in an asset. So that probably doesn't bode well. So we -- I mean, we could be the first therapy, which would be amazing because I think we were third or fourth even when we were first looking at this. But -- and this is a place where the unmet need is huge, right? So -- we're really excited about it and eager to get the data to have a sense of dose and is it getting to the skin and is it having an effect. So stay tuned.

Our next question comes from Brian Abrahams with RBC Capital Markets.

Jon, congrats on all your career achievements, and congratulations as well to Charlie and Barbara on your new and upcoming roles. Two bigger picture questions for me. I guess, first, for most favored nation policy, how do you guys model that playing out and potentially affecting you guys, if at all, particularly with European pricing that's no longer going to be under your control? Maybe remind us of your overall Medicaid exposure. And then secondly, you talked a lot on the -- earlier in the call on deployment of capital. And I'm just I'm curious how you're viewing the market for buyers here, how competitive it is, the types of opportunities that you might be interested in, in terms of stage and segment and your optimal timelines for executing on that?

Sure. So Charlie, do you want to take the first one and Babar will take the second.

So Brian, as far as MFN, obviously, like others, we're watching this, but I don't think we've seen anything specific that would apply to us. And so we'll just keep executing and watching that space. Medicaid for us is a relatively small segment. It actually is sort of between 10% and 15% of our patients. So we'll just watch. But right now, we don't see an immediate impact.

And Brian, your next question, the market couldn't be better for -- if you're a buyer at the moment and you don't need to tap -- raise more capital. And I think that's what we -- you heard from the remarks that we are in an enviable position of having sustainable cash flow. But let me give you a little bit more color. We will be broadly looking at the rare disease space. We want to be a consolidator of rare disease assets. So assets where we can -- where there's high unmet needs and we can leverage our operational infrastructure.

We have a very promising early pipeline. So we will look to balance our portfolio with more later-stage assets post proof of concept, soon to be commercial and even commercial assets. So I think the next couple of months will be very interesting from that vantage point, and we'll have some more developments over the next coming months.

Yes. And Brian, you know firsthand that companies are really struggling to find capital to fund their operations, whether it's clinical development or launching a product. So it's just a tough spot for people to be in and an opportunity for us.

Congrats on the strong quarter that put you in that position.

Our next question comes from John Wolleben with Citizens.

Sharing our congrats to Jon and Charlie as well. I was hoping you guys could talk a little bit about typical second half push and pulls with like about $290 million in first half revenue. Not much has to go right for you guys to hit that lower end of your guidance. So wondering if you think kind of all the positive dynamics here in 2Q are going to continue or just a little bit about what you see typically second half and what you're seeing so far this year.

Sure, Jon. Second half, as I've said, tends to be -- it's driven by new patients coming in. And it takes a little bit longer to get a new patient or the new patient population to the same paid rate as our overall population. And so therefore, number one, the overall paid rate tends to go down, will probably go down 1 percentage point or 2 in the second half. We don't have the opportunity to bring a big bolus of patients from new prescription or from long-term free product over to paid the way that we do in the first quarter into early the second quarter. And so we expect those same dynamics for the second part of this year. And all signs show that our demand is going to continue to be really strong.

And the last thing that I'd say in terms of the dynamics is remember that the fourth quarter, we will not have European revenue. And we've guided you to what the trailing 12 months was in terms of the revenue that was being generated when we announced the deal. So you can add a little bit of extra for the fourth quarter because it's usually a little bit higher. But that will give you some sense of what to deduct out of the fourth quarter revenue.

Yes. And Jon, you may have heard me say, but I did say in my comments, I expect us to be in the upper half of our $580 million to $600 million after subtracting European revenues in Q4.

The next question comes from Serge Belanger with Needham & Company.

Congrats on another strong quarter. Charlie, you mentioned a couple of factors behind the strength of ORLADEYO this quarter. You did mention an improvement in gross to net. So just curious if it's still within that prior 15% to 20% range. And you also mentioned you hit a new high watermark in new patient adds. How does that compare to 2024 levels when I believe you added about 300 patients for the year? And then lastly, just given the overall expansion of the prescriber base and the strong patient add, is there a case here to add on to the current sales force to take advantage of the strength?

Sure. Thanks, Serge. As far as gross to net, yes, we've been really efficient this year. And some of that is just the mix with Medicare patients getting up to a higher paid rate as we talked about last quarter, and there's a bunch of other factors as the team manages it. So I think we're in the lower portion. We're still in the 15% to 20%, but closer to 15% off of net price. And then as far as new patient adds compared to 2024, at the end of Q1, I did mention Q1 was a really good quarter this year, and it was last year was the best year we had since the first year of launch. Q1 was just a little bit better than the best quarter of last year.

And then Q2 this year blew away Q1. So we're doing really well on the new patient adds. And then as far as the prescriber base and do we need more reps? No, we don't. We have a fantastic team out there. They are able to cover the population. They're able to expand the number of prescribers quarter after quarter. And actually, if we added more people, it would decrease our efficiency and probably just tick off our customers. So we're not going to do that. And one thing that's been great is we've been growing our revenue, but our actual direct commercial spends are hardly going up at all. And that's because we've got the right data, the right message, the right team and they're executing in a phenomenal way.

And kind of back to what Babar was saying about leveraging the existing infrastructure that we have. We have made investments in patient services and more data to be smarter about where we might find more physicians. But that we can use for any product in the future. And it's not direct salespeople that you have to add. So that's why we're so convinced that putting more products into this well-oiled commercial machine is going to create greater and greater value.

Our next question comes from Maury Raycroft with Jefferies.

This is Amy, on for Maury. Congrats on the quarter. We have 2 questions on the pipeline programs, Netherton and DME. For the Netherton, what is your latest thoughts on the pivotal trial design and the regulatory timeline for this indication? Is there a defined pathway for accelerated approval either from precedents or clear KOL or FDA feedback? And for the DME program, like what would the outcomes from the Phase III study contribute to the design of Phase II or even the pivotal? And for the retinal swelling reduction results that we are expecting to see at the end of this year, what is the bar that we need to beat here?

Okay. So Helen, do you want to take the first one? Don, take the second one?

Yes. So on Netherton syndrome, the pivotal trial -- so this is a really interesting program because it is one in which there is an unmet need. And there is -- it's a very serious disease, which means that it's -- you don't need to see much effect and you don't need to see it in many patients to demonstrate that the drug is going to be beneficial for patients. What we expect with 17725 is a very large effect. This is a potent drug with high affinity. It's targeted drug and it's intended to essentially provide a replacement of the missing enzyme function. So the pivotal trial design will be looking at what is the effect that matters to patients. What is the effect on an approvable endpoint.

And we think that is changes in the skin, both how it's healing, the assessment of the skin and the patient experience, the itching. Those are relatively simple to measure. We'll be looking at those in our current trial. We'll be looking at those in a pivotal trial, and it's possible this could be a very short path to pivotal. It's possible also it could be then a short path to a registration endpoint and submission to the FDA. What that looks like and when it is, we can't say at this point. We need to talk with FDA and get their input. We need to understand if they agree with us on the endpoints and the path. But we do think that this is a program that could warrant a smaller data set and a relatively simpler path to registration.

I think to the fact that, that competition question that came up earlier, if we're first, we may be able to go really fast depending on what kind of treatment effect we have. So we'll see. And then, Don, let me set up the DME and then you can hit the specifics. So just to remind you, what we're trying to do is get a sense of do we have activity and do we have some sense of dose? And does kallikrein, plasma kallikrein play a role in DME as an alternative pathway to VEGF. Those are all questions we're hoping to answer with a small investment in a Phase I study with a single dose in a handful of patients roughly. From there, we would make the next investment, which would be a proof-of-concept study and then ultimately to get approval. But if we're able to prove that kallikrein plays an alternative role, and we have a drug that actually affects that, it's off to the races for us. But I'll let Don describe what we hope to see towards the end of this year.

Yes. Thank you, Jon. I think that is correct. The kallikrein pathway is an independent pathway of the VEGF pathway. We just presented some preclinical evidence at the American Society of Retina Surgeons this last weekend, and there was a lot of excitement about a new pathway for our product. In answer to your specific question of what the pivotal study would look like, the path for approval of drugs for DME is best corrected visual acuity.

So we will be looking for a similarity or noninferiority to existing anti-VEGF products. In our Phase II design, we will be looking specifically at change in central subfield thickness that will give us indication that the avoralstat product is effective at reducing central subfield thickness and macular edema.

[Operator Instructions] We have no further questions at this time. I would now like to turn the conference back over to Jon Stonehouse for any closing remarks.

Yes, I don't think there's a whole lot more to say when you have a quarter like we did, where you have growing revenue, profit, great cash flow, the start of great cash flow and strong underlying demand continuing to increase. It doesn't get any better than that. And we're going to continue to execute and looking forward to how the rest of the year unfolds. So thank you for your interest. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the BioCryst Pharmaceuticals Conference Call. [Operator Instructions] 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, Betsy. Good morning, and welcome to our conference call to discuss the sale of our European business. The press release we issued earlier today is available on our website. Participating with me today are CEO, Jon Stonehouse; Chief Commercial Officer, Charlie Gayer; and Chief Business Development Officer, Clayton Fletcher. Following our remarks, we'll answer your your questions.

Today's conference call will contain forward-looking statements, including statements related to the proposed transaction, including financial estimates and statements as to the expected timing, completion and effects of the transaction. 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. Earlier today, we announced the sale of our European business to Neopharmed Gentili or NG. This transaction is attractive for a number of reasons that support our strategy, most notably what it does for the company financially. As a reminder, our strategy to create greater and greater value at BioCryst has three main drivers: Number one, ORLADEYO becomes the global market leader by making it available to HAE patients around the world and generating growing and sustainable revenue on its way to $1 billion at peak.

Number two, launch the next marketed product from our pipeline or sourced externally to create value beyond ORLADEYO and sustainable growth well into the next decade. And number three, build the financial strength to be independent of the capital markets, generate substantial and growing profit and have a balance sheet that allows us to do meaningful BD if and when we find attractive assets.

The deal we announced today aligns with and accelerates this strategy and allows us to take a big step forward in building our financial strength. While we were not looking to sell the business, this deal was attractive for several reasons. Upon closing, NG will pay BioCryst $250 million for the European business, which includes the people and ORLADEYO in Europe. BioCryst is eligible to receive up to $14 million in future milestones associated with sales in Central and Eastern Europe.

The amount of upfront cash alone is accretive to the value of the company and represents a multiple of between 5x to 6x the trailing 12 months of sales through March. The European business represents less than 10% of the global sales and has much lower margins than most of the other territories where ORLADEYO is available. So we are excited about the impact this transaction has in pulling forward profit and the greater value created compared to the path we were on.

Our plan is to use the proceeds from this transaction to pay off all remaining debt -- term debt with Pharmakon. Doing this cleans up our balance sheet and saves us approximately $70 million in interest payments over the life -- the remaining life of the loan. This coupled with improving our profitability by focusing on the higher-margin business primarily in the U.S. could put us in a position that by the end of 2027, we have nearly $700 million in cash with no term debt. This is an improvement of approximately $400 million in net cash from our previous projections.

While we are selling the business in Europe, coordinating with the team remains an important part for the brand globally and financially important regarding the royalty. Working with the team we built, which has a great track record of success with ORLADEYO is another attractive aspect of this transaction. We have also agreed with our royalty partners that global royalty calculations will include European revenue and that NG will be responsible for royalties from European sales. This is important as it will enable European revenue to count towards the royalty tiers where we paid no royalty over $550 million and will contribute to the cap on the OMERS' royalty, which once reached, will significantly reduce future royalty payments even further.

For those unfamiliar with NG, they are a leading specialty pharma company primarily focused in Italy with over EUR 300 million in sales and EUR 125 million in EBITDA last year. They have a long history of collaborating with international pharma partners like Merck & Co., Novartis, Sanofi and Bayer to name a few.

Founded by the Del Bono family in Italy, they have grown through acquisition with the help and financing of two major private equity shareholders, Ardian and Renaissance. Off this strong foundation, their strategy is to become a pan-European rare disease consolidator, and they chose our team and ORLADEYO to be the launching pad for this strategy. We believe this is a capital-efficient strategy that makes a ton of sense and could develop into a thriving European rare disease business, a business that could be a partner of choice for U.S. rare disease companies, including BioCryst, when we advance additional products to the market.

Our current estimate is that the transaction will close fairly quickly, and we are targeting early October. Since we will report Q2 results in early August, prior to the deal closing, you should expect us to provide you with a traditional view of our business performance, including revenue and expenses related to Europe. And then on our Q3 earnings call in November, which will be after the transaction is expected to close, we plan to provide you with updated revenue and expense guidance, reflecting the new dynamics of this transaction.

As we described in May, we expect Q2 will be another strong quarter for ORLADEYO, and the transaction we are announcing today provides significant additional financial strength to the company. The value we are receiving is much greater than we could have ever gotten out of the business operating it ourselves.

So in summary, this deal puts us in a much stronger financial position with $250 million in upfront cash that we will use to pay off all the remaining term debt, a $70 million savings on future interest expenses, a $50 million reduction in annual operating expenses, the royalty benefits of EU sales alongside a reduction in royalty expenses, a significant increase in ORLADEYO margins and perhaps most importantly, a company that will end 2027 with approximately $700 million in cash and no term debt.

This concludes our prepared remarks, and we will now open it up for your questions.

[Operator Instructions]

The first question today comes from Jessica Fye with JPMorgan.

Congrats on what sounds like a smart deal. I guess I was hoping that you could sort of recap the mechanics related to what this means for your royalty obligations. And yes, maybe I'll just stop there.

Yes. No. So think of it as they are a pass-through for BioCryst to pay the royalty. So the revenue that they generate, they will pay a royalty on that, and it will then be consolidated by us in the overall royalty calculation. So that's why I said we benefit from that by not having to pay that royalty, but getting the benefit of adding it into the calculation for the tiers. So remember, above $550 million, we pay nothing, 0. And then on the OMERS' debt, it goes towards the total cap, which is also significant because when that falls off, our royalty rate is reduced dramatically. So it's a pass-through is the way you should think of it.

The next question comes from Brian Abrahams with RBC Capital Markets.

This is Nevin on for Brian. Congrats on the deal. Just wondering on our side, if there's any particular pipeline programs that now you're looking to accelerate development in or if you could speak to any potential sales force expansions or other efforts to drive additional growth in the U.S. Do you see this refocus potentially enabling accelerated growth in the U.S.? And then if I could also ask a quick question as well on what your base case now would be for peak sales for ORLADEYO in the U.S. worldwide and if this deal has changed any of that as well?

Charlie, I'll start with the pipeline, and then you can take the commercial questions that Nevin has. So listen, I think we've been pretty clear that there are two main programs that we're really, really excited about in the pipeline, and that's 17725 for Netherton and avoralstat for DME. Being in a strong financial position, we were in a strong financial position to fund those programs before. We're in an even stronger position now. And if we can accelerate them, we absolutely will. But the key is data later this year for both of those programs.

Nevin, as far as the sales force goes, as we've described previously, we have a team out there of 40 reps. And we think we've got the right team in place, the right size. We're always looking at the margins, what else we can do to keep improving our performance, our already really strong performance. But no, we won't need to expand our sales force. As far as the peak sales, the $1 billion in peak sales, of course, $800 million of that is coming from the U.S. of the other $200 million, roughly half of it was coming from Europe and then the other half is coming from everywhere else in the world. And then remember that, that peak sales estimate did not include the pediatric indication when we get that.

So at some point in the future, both with peds and the overall global peak sales, we'll probably update. But right now, that's -- those are the dynamics.

Yes. And I think the other thing that I really want to stress is that not all sales regionally are worth the same value. The value of a $1 in the U.S. goes a lot farther because of the profit and the profit margin. So always think about that $800 million as the most valuable contribution to cash in the company. And so us selling 10% of the company on something that was -- from a direct basis was about breakeven. It just rapidly improves our financial situation.

Next question comes from Steven Seedhouse with Cantor.

You mentioned a couple of times business development, I think you even said if and when you find external assets, you'd pursue those. Just curious a couple of things. Strategically, what areas would this be sort of within allergy or outside of allergy that you'd be looking to expand the pipeline? And then would you be interested in early-stage programs or mid- or late-stage or even commercialized assets if they become -- if and when they become available?

Yes, you're welcome, Steve. So I think the first part of the answer to your question is what are we trying to do? We're trying to bring another ORLADEYO forward, right, so that we have this sustainable growth into the next decade of revenue and profit. And so later stage is better. Of course, we -- one of the beauties of rare disease is we don't have to put it in the bag of the existing sales force. If we find another rare disease where we can put up a 30 or 40-person sales force, we have all the other infrastructure.

So the profitability on that could be significant. So what are our criteria? Rare disease, and we've said before, Phase II-ish and later are things that we'd be really interested in.

And then the last thing I'll say is this is a market where everybody believes they can bring their own product to market. And it's just crazy that you see all these U.S. biotech companies wanting to bring their products forward on their own. That is not capital efficient. One of the great things I see with Neopharmed is that they're going to be the consolidator in Europe. And honestly, we're looking to be the consolidator in the U.S. and so -- and get the most efficiency. I think Charlie and his team have shown that we are a launch machine, and we can execute on the launch. And so yes, we're going to continue to pursue other products that could be the next ORLADEYO.

The next question comes from Stacy Ku with TD Cowen.

Congrats on the deal. So we have a few follow-ups. First, on business development, you highlighted around or nearly $700 million cash by end of 2027. We are waiting for some interesting updates by year-end. So just kind of curious if you could also comment on maybe the timing and maybe your decision to highlight end of 2027. So that's the first question.

And then second, another follow-up on ORLADEYO, a little bit of an aside, but maybe talk about your expectations for peak sales. We had always thought ORLADEYO could achieve about $1 billion in U.S. alone, especially considering the IP durability. So just help us understand how you're thinking about maximizing the opportunity. And I know you've already mentioned the pediatric HAE patients.

Sure. So why 2027, we've actually referenced it before. Remember, Stacy, we gave you the compound annual growth rates, I think, over a year ago around revenue and OpEx. And so that got us to the -- I think it was around $600 million in cash and $250 million in debt after we paid down some of the debt. And so I just wanted to give you a benchmark that now it's $700 million in cash and no term debt. And a lot of that is driven by reducing expenses and continuing to grow and improving profitability. So that's one component. Cash is one component.

I think the other piece is the ability to access more debt if we find something attractive at a lower cost is another mechanism for us. So just the strength that we're in and the financial position that we're in opens up a ton of different options for us.

And Stacy, as far as the $1 billion peak and your comment about the U.S., I think you know us well. You've heard us talk about how we want to be accurate, and we have a lot of information on the market and how we see it. And so at some point in the future, I think we will update our view on global sales. We will also update, as I said earlier, our view on pediatrics. We want to wait until that gets launched and we see what the trajectory is. But whether it's $1 billion, whether it's something else, at some point in the future, we will update it. But even if it's $800 million in the U.S., as John said, a really profitable $800 million, that is a great business.

Okay. Understood. So it sounds like timing is really in terms of business development, you're just kind of looking for the right asset at the right time and it's not.

Yes, that's why I say if and when. Absolutely. If and when and when we find something that's attractive, we can act on it in a much better way, not using our shares, by the way.

The next question comes from Serge Belanger with Needham & Company.

Apologies if you already covered this, I joined late. But I guess, why now? Is this something you were shopping and/or there was an inbound interest from NeoMed that came in? And then secondly, can you comment on the regulatory delay for the pediatric ORLADEYO NDA that was announced earlier this week?

Sure. Sure, Serge. So we weren't shopping. We were very comfortable with the business that we had. And NG came to us. And honestly, with the value of the deal that they proposed and then having our team continuing to sell ORLADEYO, it was just an offer that was incredibly attractive to us at the end of the day. And I've talked about the financial benefit that the company gets as a result.

On the peds, this is a very standard thing, right? We have an NDA under review. We gave some final reports after we had done the original filing. The FDA interpreted that as a major amendment, and they have the right to add 3 months to the PDUFA date, and that's exactly what happened. So our PDUFA date is December 12. And we remain very confident and excited about bringing the granules to pediatric patients with HAE.

The next question comes from Maurice Raycroft with Jefferies.

Congrats on the update. As a follow-up to some of the earlier BD questions, just wondering how the new balance sheet strength and potential for additional debt, how that translates to what a BD deal size could look like? -- Where we starting?

Yes, I don't think we're in a position today. We haven't paid off the debt. We don't have the proceeds. But I don't think we're in a position yet. But I can tell you, it's a lot bigger than it was at a lot lower cost of capital. And then at the same time, we're generating cash. I think that's the thing you got to keep remembering is we're building the cash position while at the same time, being in a stronger position to take on reasonable cost debt if and when we decide that there's something to invest further on.

Got it. Makes sense. And for -- can you talk more about the plan to pay off current debt, including how you're thinking about time lines and size of installment payments for that?

Yes. So with this deal, we can pay it all off, and that's the intent. So at closing, we'll get access to the capital and shortly after that, we'll be paying off the debt.

[Operator Instructions]

The next question comes from Jon Wolleben with Citizens.

Two for me. Wondering how we should think about the realization of the $50 million in OpEx savings, if that's going to be immediate or coming in over time. And then I know you guys have brought back Japan under your wing. How do you think about the Japan opportunity? Is that something else you'd look to partner again or sell off and just focus on the U.S.? Or how do you think about the other geographies?

Yes. So the $50 million is kind of the general direct expense associated with the business in Europe. And so on an annual basis, that expense will be removed after we close the transaction. So you'll see that over -- the big impact you'll see is in 2026. number one. But there's other expenses. There's the royalty expense that we no longer pay and there's headquarters costs in supporting the organization that we didn't put in here as well. And we're still working through what all that looks like. But later in the year, you'll get a better sense of that. So $50 million is kind of the minimum savings that we're going to get from this.

And then on Japan, no. I guess I could always change my mind if we got another offer from somebody like NG in Japan, but the answer is no. We deliberately went into a situation where we felt that we could change the relationship with [ Tori ], which we were successful at. And the pricing in Japan is such that the profitability is way better in Japan. And so it's the second highest price after the U.S. And so no.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Stonehouse for any closing remarks.

Thank you. Thanks again. Again, I think this just puts us in a really strong position as a company. And so thank you for joining our call today. I want to do a few thank yous quickly first to the NG team and Alessandro Del Bono for his diligence in helping get this deal done, and we look forward to being your partner going forward. I want to thank the transaction team, your tireless pursuit to make our company more valuable is just incredibly appreciated.

And then lastly, to the European team and the tremendous value that you've created for our company. Thank you. So that's it for the call. Have a great day. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Welcome. Thrilled to have you all here at the Goldman Healthcare Conference for 2025. We are early in the conference. It's my great pleasure to be here with BioCryst with Jon Stonehouse, President and CEO of BioCryst. I'm Ryan Fisk, Managing Director in the Healthcare Investment Banking Group at Goldman Sachs. Thank you for joining us today.

Jon, thank you for joining us today. How are you?

Yes. Thanks for having us. I'm doing great.

Okay. Well, wonderful.

Why don't we jump in? I'd like to spend some time on ORLADEYO, which has been doing very well commercially in recent quarters. I would also like to make sure that we spend some time on the pipeline today and just talk about some of the programs that are going to produce data this year. But maybe to set the stage, can you share high-level overview of how you think about BioCryst's strategy, particularly as you approach rare diseases and how that thus far has translated into commercial success for BioCryst?

Yes. Great. Before I get started, I'll be making some forward-looking statements. They have risks. You can find our risk factors on our website.

So we chose rare disease, and it started that we believed if you could bring oral drugs to patients with rare disease, you had a real disruptor because the vast, vast majority of any therapies were injectable. But we've evolved that, and we're actually starting our first protein therapeutic program with BCX17725 in Netherton. So it's gone beyond just oral and a program injectable in the back of the eye.

But really, what we're trying to do is build a rare disease company with the engine of ORLADEYO as the revenue source and cash source, and it's a disruptor, and we can talk more about why, but it's definitely a disruptor in the HAE market; followed by -- we believe there's another ORLADEYO that comes out of our discovery group. And we've got 2 programs that are going to be starting to generate data by the end of this year. So we're excited about that as evidenced that there's another ORLADEYO in there.

And then third, financially, we are in a fantastic spot. And we had laid out a couple of years ago our path to profitability, and we accelerated by year. So this year, we will be net income and cash flow positive for the full year. And so that just puts us in a different position. We're capital markets independent. We want to pay down our debt and clean up our balance sheet, and we started that in April. And so we're really excited about where the company is.

Yes. Okay. All right. Well, that's a great setup. And let's dive into each of those subcategories as we get into this. So starting with ORLADEYO, as you said, it's done remarkably well in a competitive HAE space. What do you really think of as the core drivers behind the strong launch? And what's continuing to fuel growth today?

Yes. I think, one, you got to have a good drug. And I think when we first put out the pivotal data, some people questioned whether it was an effective drug and could be competitive or not. But the key, if I can leave investors with one thing that's really important to remember, is this drug when it works in some HAE patients, the majority of HAE patients, it works as well as any other drug as well as injectables. And we've been able to show that in real-world evidence data with real-world evidence data and studies that we've been running since launch. And that has allowed us to start to have conversations with physicians about switching.

But what you got to remember is also is patients, because they're controlled now in this marketplace, they don't see their doctor much more than once or maybe twice a year. And you can bet that the first time the doctor brings it up, they're not going to say, oh, yes, I want to switch. It's usually, if I'm controlled, why would I bother? And so chipping away at that and getting them to understand that if they're one of the majority of people that try ORLADEYO and are controlled, you could be controlled on a once-daily capsule to manage your disease, which is a game-changer for patients.

Yes. Yes, that's interesting. And so what specifically do you hear from those patients once they have switched to ORLADEYO?

Yes, life-changing. We've gotten to know patients really well. And one of the coolest things we hear is they forget they're sick, right? When you stick yourself with a needle, when you see your medicine in the refrigerator, it's a reminder that you have a disease that you need therapy for. When you're taking a capsule once a day, it's like your daily vitamin, and stress is a trigger for HAE attacks. And so it kind of all builds together where you're less stressed, you don't feel like you've got the disease anymore, and they're doing things that they never thought they would be able to do, which is wonderful to hear.

Yes. Yes, that's great. So maybe let's flip the lens to the physician prescriber side of it. You've shared very interesting market research on patient preference orals, orals versus injectables. What do you hear from the physicians? And what do you think is driving increased confidence in prescription?

Yes. And I think that increased confidence is the key to what we're seeing in the marketplace. It really comes down to when they try it and they have success with the drug, they start using it more. And I think there was this perception, oh, it doesn't work as well. People will trade efficacy for convenience. No way. The table stakes for patients and physicians is it's got -- you got to have control of the disease first. And if you can have that and be on a really convenient once-daily oral, it's great.

So physicians that -- maybe they -- the first time they tried it, they had a patient that it didn't work in. And so they kind of backed off and didn't want to switch. And when we started putting out the real-world evidence, they gave it another shot, and they started having success with the drug and then started using more of it. And that's why they say forward-looking that they see more and more of their patients will go -- will be trying ORLADEYO.

Yes. Yes, got it. Okay. And then an important metric that you've always forecasted is the idea of patients moving from free drug to paid. That transition has been accelerated relative to how you've guided The Street over the course of the last quarters and years. What tactics have really helped accelerate that?

Yes. Well, maybe what I'll do is explain what we're shooting for. So in this path to $1 billion, a key element and driver of that value is getting about 85% of the patients on ORLADEYO on paid therapy. And honestly, when we first introduced the drug, the idea was to get patients on to drug fast, and so we put them on free drug quickly. What that led to is some payers saying, oh, they're on free drug. We'll make it a little bit more difficult, and we ended up with people that were on longer-term free drug that had insurance and should have been paid.

So we built an apparatus around patient support and helping offices with the process of getting through the insurance review and making sure that they had all the tools and information that they needed to have the best shot at getting the insurance to cover it. And I think the other piece that's really helpful with the plans is this real-world evidence. Again, they see that the drug works and that our confidence in ORLADEYO has gone up. So their willingness to pay has improved as well.

But really, this kind of basket of services we call Empower Patient Services has played a big role in the improvement. That being said, we're at 84% right now. We had a huge jump in the first quarter of this year, largely for Medicare. A couple of years ago, the charities had run out of money to help with co-pay assistance for patients on Medicare, and a senior can't afford a big co-pay for a rare disease drug.

And so we ended having -- I think we're in the high to mid-80s in terms of paid rate, snapped to like high 40s. And in the tail end of this year, I think we were at 56%. And in April, we're up to 89% with Medicare. So we're one of the view that says the Inflation Reduction Act has actually been really helpful because that $2,000 co-pay has made it more affordable and allowed charities to spread the money out further.

Got it. Okay. That's great color. You recently submitted a pediatric NDA. How do you think about the opportunity in younger patients? Is that going to be a meaningful market for you all?

Yes. Unmet need, why is it? I think it's huge, right? You think about a 3- or 4-year-old and giving an injection every 2 weeks, it's just -- the treatment might be worse than the actual disease, honestly. And so this idea of sprinkling these mini-tabs either in a glass of water that they can drink down or some soft food that they can eat it with is just game-changer. And we've heard that from patients and the community really being supportive. And the enrollment -- my experience in my 30-plus years of being involved in clinical trials is when enrollment goes faster than expected, you've got something that patients want, and that's exactly what happened here.

So size-wise, it's not huge. It's about 500 patients in the U.S. in terms of potential population, of which about 200 are treated that we think are available. But we also think that patients are sicker than previously thought through the data we've collected in our study. And so we think having a more convenient therapy that isn't as challenging as injectable may [indiscernible] the universe of who gets treated on prophylaxis earlier and longer, number one.

And then there's a halo effect that we've seen with adolescents where the child has success with ORLADEYO. This is a hereditary disease. The mother or father likely has the disease and they're on TAKHZYRO, for example, and they're like, wow, I see my kid doing really well, maybe I should ask my doctor about it as well. And we think there'll be a halo effect. So we're not ready to predict what it will do. It's not in the forecast. It's not in the $1 billion. But I think once we get about 12 months-ish under our belt, we'll have a better idea of what the potential is here.

Yes. Yes, got it. Okay. Great. And so maybe you've been very forthright in your public commentary about what the path to $1 billion is over the next 4 to 5 years. Maybe just thinking about that lens of a 5-year lens, what do you see as the most important levers to expand ORLADEYO's market share over that period? What are you learning about HAE market dynamics that inform that view?

Yes. I think we said it, I don't know, it was a couple of years ago that we actually laid out the path, and we're ahead of schedule on almost everything that we said we needed to achieve to get there. So what are the components? An average of 200 new patients, net new patients per year. We've been above that for the last -- well, since launch, we've been significantly above that.

And so the demand, surprisingly, fifth year into launch continues to be really strong. And I think it's this increased confidence we talked about before both with doctors and patients. And so keeping that going another year or a year after that, it has to be an average of 200. And so as you get closer to 2028, 2029, we think it will slow down, but we're well ahead of schedule on that front.

The second piece that we talked about is paid. We didn't think we'd get there until 2029, 2028, and we're there now basically at 84%. And I think we can do better than 85%. So that's our side. And then the last piece is price increases. And we said very minimal price increases to add to that value, and we've been doing that on an annual basis. And again, a little bit higher than the minimal increase, but yes, it's all ahead of schedule.

So our confidence in that. And this year, we're going to be somewhere between $590 million and $600 million, and so -- I'm sorry, $580 million and $600 million. And so we're well on our way to $1 billion at peak.

Yes, absolutely. Okay. All right. Cool. You've been very fulsome in the market research that you've shared with in your public statements, which is interesting just to watch the evolution year-over-year on consistent views. Could you expand a little bit on that of just how you think about key insights that I suppose you observe in the market research and how it's led to some of the performance in recent quarters?

Yes, it's core to what we do. We chose a model where we use a sole-sourced specialty pharmacy. And as a result of that, we get a lot of really rich data and insights about patients, both those that have success on ORLADEYO and those that don't. And it just makes us smarter about what's going on in the marketplace.

And one of the things you use market research for is friction points, like what's going to prevent somebody from making a decision to switch. And we get at -- our goal is we want to get at the truth. A lot of times in companies I've been in the past, a senior leader says, find me the data that makes this believable. Here, we're like, tell us what's true, and we'll follow that. And so it's been really helpful.

And I think the best place that we've used this is we put out our market research on competitors and ourselves in patient share over a 10-year period. And we showed you the robustness, 175 docs, 100 patients, over 50 payers. We get preference shares. We then put it into a Monte Carlo simulation that simulates patients only see their doctor once a year, and it spits out an answer.

And the answer is the early disruptors are the ones that are going to be market leaders come 2033, and that's TAKHZYRO and ORLADEYO. And it's because it's really sticky, right? If you're controlled on a drug that's once a day and that control is similar to anything else you could go on, what's going to be the benefit of switching to something else? There's nothing. And so losing patients to other drugs when you have patients controlled on ORLADEYO is just not something that we see in the data.

Yes. Yes, interesting. And maybe with that concept of picking up with the idea of TAKHZYRO, you had mentioned -- you've referenced, Jon, a couple of times in this conversation the difficulty in getting patients to switch. So with the comparison to TAKHZYRO or C1 inhibitors or just any injectable prophylactic treatment for HAE beyond the oral, talk a little bit more, please, about the benefits of ORLADEYO, which is ultimately getting these patients to switch off the injectable.

Yes. I mean it all comes -- the biggest obstacle we get, Ryan, is my patients' controls, why on earth would I mess that up? And if you think about it from the patient perspective, too, if they're on TAKHZYRO or HAEGARDA and they had attacks before and now they're controlled on a prophylaxis, they're scared to switch from something like that.

So what we've done, and I probably sound like a broken record, but our real-world evidence has really given physicians large patient sample sizes, right, 450 patients in types 1 and 2 HAE and 350 patients in normal C1, and it shows that the reduction in attacks matches injectables. And so that's opened the door for people to say, hey, maybe we should -- maybe I should consider trying this. And then when they have a great experience with it, they want to try it in more patients.

And so that's been the big win is generating that data, sharing it with physicians and then chipping away at, hey, now it's time to try it. And back to the pediatric, there's some -- we still have about 20% of our top potential prescribers, about 5 [ to 6 have not ] prescribed ORLADEYO yet, but they have pediatric patients. And we're going to go into those offices and say, come on now, there is no reason that you wouldn't switch a kid that's on injectable prophylaxis to ORLADEYO. And if they have great success, they may consider using it for their adult patients as well.

Yes. Yes, great. Let's transition. As mentioned, I want to spend time on ORLADEYO, I want to spend time on the pipeline, I want to spend time on the financial profile of the company. Let's transition a little bit to the pipeline assets. Maybe one more word on the pediatric opportunity for ORLADEYO. Remind us, please, the time line to that -- so NDA is submitted, time line for potential approval?

Yes, PDUFA is September 12. So we're working with the agency now as they go through the review and responding to questions, but we're hopeful that there could be a launch yet this year.

Yes. And is there substantive expansion of the commercial footprint needed for...

None. None, which is wonderful. So the sales force size is where it needs to be. And so it's a highly profitable segment.

Yes. Yes, okay. All right. So turning to the pipeline. So you've got 2 new programs coming into focus: BCX17725 and avoralstat. So let's talk about these 2. So firstly, can you walk us through the rationale behind pursuing Netherton syndrome with the 17725 asset? What's the unmet need? How does your KL5 inhibitor uniquely address it?

Yes. So it's a horrible disease. It's basically a [indiscernible] that leads to a missing protein that you lose the kind of break that you need for normal skin turnover. And so you have this just rapid skin turnover because you don't have the break. And it can, at birth, be lethal, right? Think of how important skin is to protecting against infection, hydration, a bunch of other things. And so it can be -- there's a decent mortality rate with young children, but you can have it for lifelong.

And it's one of these diseases, as we've gotten to know patients better, that there's nothing to treat them. They use lotions and creams to keep their skin moist. They cover themselves up. They -- sometimes they wear wigs because it affects your hair as well and there's hair loss. And it's just -- it's very sad, honestly. And these patients haven't had a whole lot of hope.

And so to bring something -- what we hope to bring is something that will restore that break that we -- that I talked about in terms of our KLK5 inhibitor, BCX17725, and restore normal skin turnover. So the idea is, I mean, these patients could potentially have normal skin again. And this is a disease that affects you from head to toe. And so it's not like you can spot treat and things like that. You need something that works systemically.

Yes. Yes. Okay. And so what are the next clinical catalysts here? What should we watch for?

Yes, it's pretty interesting. So we're in a Phase I study, has its normal healthy volunteer SAD/MAD portion that we're well along the way. And now we've chosen a dose to start to study patients, Netherton syndrome patients because the key to this program and the biggest risk in the program is does the drug get to the skin. And then when it gets to the skin, does it act the way we hope it does, which is restore the normal turnover and bind to the site.

And so you can only do that in patients and do the skin biopsies and the like. So we're going to get a bunch of really interesting biomarker data in addition to clinical data of looking at the skin. And we hope to have a handful of patients in this what we call Part 3 of the Phase I study by the end of the year. And if it has the kind of effect we hope it will, we hope to start to see some level of activity and get some sense of dose.

Yes. Yes, understood. I guess if you think about market size, unmet need, I mean, these patients, as you said, have -- there's no standard of care now. They're using lotions. What is the patient population, the prevalence in the U.S. and globally?

Yes. So there's no diagnostic code. The way we kind of got an estimate of the population is there is one clinical effect called bamboo hair, where you actually have to look at a strand of hair under a microscope and it looks like bamboo. And we found about 1,600 patients in the U.S. But if there's no diagnostic code, there's no treatment, there's really, what can a doctor do for a patient?

And so we believe this is like a lot of other rare diseases, maybe even like HAE back 10, 15 years ago, where the folks at ViroPharma thought there were 2,000 patients and now there's 11,000, right? And when you start to have therapies in a population in a dermatology practice that has a group of ichthyosis patients and you do a genetic test and you screen for it and now you have a drug, we suspect that could be 2, 3, 4x the size of the 1,600. And so we're really excited to get the data and then to start to see if we can get a better handle on what the true population is.

Yes. Yes, understood. Yes, it's very interesting. Okay. So transitioning to the eye. So you were developing avoralstat for DME. Talk a little bit, please, about the use of a plasma kallikrein inhibitor, is it well suited for the space? How do you think about potential treatment in the eye?

Yes. I mean investors might say, you just said you guys are a rare disease company, what the heck are you doing in an eye disease? But the answer is, opportunistically, we think it's worth studying this drug because DME, while VEGF inhibitors work really well in a lot of people, there's still 40-ish percent that continue to progress and have decay in their visual acuity. And so why is that? Well, there's some pretty deep scientific evidence that says there's an alternative pathway other than VEGF, and that's plasma kallikrein.

And so similar to what you see with HAE where contact activation ultimately leads to the swelling, you get the same thing with diabetic patients in the back of the eye and this release of fluid that causes the swelling in the back of the eye and effect on the retina. And so there have been a number of kallikrein inhibitors that have failed. And so we believe it's because you didn't get a potent drug in the right space for a long-enough period of time.

And so we've taken the characteristics of avoralstat that we studied in HAE where it wasn't a really good oral drug, it was poorly soluble and poorly permeable, and we now deliver it through a device from Clearside suprachoroidal device in the back of the eye, and it acts like a depot and it just sits there. And we've seen in animals 9x EC90 drug concentrations at 6 months.

And so we're really excited to see with a small study, a Phase I SAD study in patients because you don't want to inject healthy volunteers, what this drug could do in terms of the swelling of the eye and even visual acuity over time in a single dose, right? You give one dose. And if you see an effect, duration between 3 and 6 months and you see VEGF-like effect, you've got a real drug. And it's a small study. If we're successful, it was a great investment. If it was unsuccessful, it was a small investment that was worth the risk.

Yes. Yes, absolutely. So an efficient use of capital. Remind us, please, on exact time lines on when we're going to...

Yes. So we hope to get this thing started sometime between summer and the early part of the fall, and we hope to start to get some patient data by the end of the year where, again, like in the Netherton program, we have some sense of activity and some sense of dose.

Yes. Yes, understood. Okay. Interesting. And so then as you think about the market, like you said, it's a large market. It's a crowded market. The biological rationale and just the differentiated approach relative to VEGF treatments is all well reasoned. How do you forecast the potential placement of avoralstat in the ultimate commercial treatment paradigm? How do you think about that differentiation then?

Yes. I think the simplest way to say this, it's a huge market. And if there's close to 50% of patients continue to have visual acuity decay, then if we can bring something forward that addresses that population, it might even be used first line, then why would you go to something else that you're not 100% sure is going to work or you got to switch from one VEGF to the next?

And so I don't know until we see the data, what the application is going to be and what kind of efficacy we will see, but it could be huge. And one of the things that's really interesting is from a commercial perspective, the number of retinal specialists in the United States is about the size of the HAE prescriber population. So from a commercial footprint perspective, it's not too much different than a rare disease. The clinical trials are much more expensive and bigger, but the commercial effort is not.

Yes. Yes, understood. Okay. That's great. Let's talk about the financial side of the business. So you are a commercial stage rare disease company who has demonstrated strong financial discipline. Revenue is growing, profitable, growing profitability. So maybe to get into that, so you said that you expect to be profitable in 2025 now. That was previously 2026. The guidance has been brought up. Tell us about what's driving that shift? And then that balance, and it gets into comments that you just made around DME as well, how you are balancing profitability with pipeline investment?

Yes. So what's driving the acceleration is ORLADEYO, plain and simple. The expenses are going up slightly because of the revenue going up, ORLADEYO revenue-related expenses like distributor incentive comp and things like that. But it's growing so fast that we were able to pull forward the profitability by a year. And we've put out guidance that basically shows '25, '26, '27, the compound annual growth rate of revenue around 20% and expense around 5%. And what that leads to is, in the end of '27, about $600 million in cash.

So we want to not only be profitable, but we want to give you a sense of the magnitude of that profit. And we have Pharmakon debt that's now down to $249 million left to be paid off. And our goal is to get that thing paid down and not wait for the bullet payment that's due in April of 2028. But with that $600 million, we can easily pay that loan off and still have a good chunk of cash on the balance sheet.

Yes. Yes, absolutely. So with that Pharmakon debt, so it was in April, you paid down $75 million, which is beneficial from an interest expense profile perspective, as you said, a capital structure perspective, the view is to pay that down over time. Any sense of how you're going to approach that in the coming quarters and years?

Yes. I'm not going to guide to it, Ryan, but the goal is pay as much, if not all of it, down before the bullet payments do as we can based on the revenue that we have. I mean with the $75 million payment, I think it was an estimate of close to $23 million in interest savings over the life of the loan. I'd like to do that 1 or 2 or 3 more times to not have to pay the interest.

And so it will be a balance of how much cash do we have on the balance sheet, as you said, what do we need to do to invest. Those compound annual growth rates that I shared with you, that has pivotal study costs for both avoralstat and BCX17725 for Netherton. So it's not insignificant investment, but the revenue far outstrips the expense growth rate, and so you end up building more and more cash.

And so one of the questions is, once you pay off the debt, then what? And my belief is we're going to look to go on offense in terms of looking for things that could, from the outside, that could complement our own pipeline in ORLADEYO. And I won't get into any specifics, but there's a number of things that we could take a look at. There's a lot of stuff that we don't want to take on somebody else's risk, whether commercial or clinical. But we want to be opportunistic, and we want to be in a financial position where we can do that and not have to use our shares.

Yes. Yes, that's very interesting. So the company moving to an offensive posture from a corporate development perspective as you as -- as profitability continues to grow, cash accrues and the debt profile is -- continues to be addressed.

Okay. Maybe with that in mind, the concept of bringing it all together, ORLADEYO performance, pipeline programs that are going to produce data over the course of 2025, the balance sheet being addressed, and we're actively seeing you do that in the comments that you made, Jon, just now about potential for corporate development, the what's next are very interesting as something to think about as the next phase. Let's talk about that next phase. So just the idea of who BioCryst will be 3 to 5 years from now in the next phase of evolution, what does that look like from your perspective?

Yes. In my mind's eye, it's becoming very clear as evidenced by our performance. So $1 billion in ORLADEYO revenue looks very achievable from our perspective. And as I said before, on all the parameters that lead to that, we're ahead of schedule. So that's one piece of it.

And then in a Phase III program and on our way to filing and getting approval on a second product, and I'd love it to be BCX17725 in Netherton's disease. And we find out that the market, oh, no, it's not 1,600, it's 4,000, and we're the only drug available for it, and we alter the course of -- and restore normal skin turnover.

And then third, we've got the capital to be able to look at external things as well and certainly fund -- there's more in the pipeline as well. There's a bunch of complement programs that are still way too early to talk about, but this kind of continuous engine that brings out another ORLADEYO and another ORLADEYO onto the marketplace for patients in need and financially supports the company.

If you look at companies today that have a product on the market, a promising product in the clinic or the next product and it's sourced by their own engine or they're really good at BD, the size of those companies are $10 billion, right, in terms of market cap. So I don't see why BioCryst ultimately can't get to that spot with the ingredients that we have to get there.

Yes. Yes, absolutely. Absolutely. So the share price has done well over various periods. Over the last year, the share price has done very well as a result of the strong results from ORLADEYO and just kind of the broader picture of the company pipeline, financial profile. Are there areas where you think The Street may be under-appreciating the story, whether it's commercial durability, pipeline, optionality, anything else?

Yes. I think there's a number of things that as we execute, we can start to have a counterargument. One might be, hey, you had some programs that you had to stop like our Factor D program, and so why are you confident that you have another one? Well, you know what the attrition rate in our industry is, Ryan. I think we did a good job of making sure that when we saw there was no commercial viability for our programs, we shut them down. We didn't spend good money after bad. And so while it's painful to stop any program, I think making that decision at the right time is really important, and I think we did that.

But our confidence -- the risk profile of these 2 pipeline products is very different than our Factor D inhibitors. A protein therapeutic, the off-target toxicity is just very different than a small molecule for Factor D. So I could see people being skeptical of it. But as we generate data, the skepticism, I think, is going to decrease.

I think there's some people saying the competition, they don't believe our market research. I would argue it has the least bias of anything I've seen out there in terms of predicting the future. But there's 3 competitors coming to the market this year. There's going to be more coming in future years. As we continue to steadily execute on the commercial program, that argument is going to disappear.

And so the only way I know -- you said the share price is doing well. It's not doing well enough, in my opinion. And I would like to see it do better. But the way that we're addressing that is by executing, saying what we're going to do and then executing and doing it. And I think we're well on our way.

Yes, absolutely. Well, Jon, I think that's the time we have. Congrats on recent progress. Looking forward to seeing what the rest of 2025 brings for you all.

Yes. Thanks for inviting us.

Sure. Take care.

Hi, everyone. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. With great pleasure, I'd like to welcome Helen Thackray, the Chief R&D Officer from BioCryst. Thanks so much for joining us today, Helen.

Thanks very much, Maury.

And we're going to do a fireside chat discussion. So maybe to start off, for those who are unfamiliar with BioCryst, if you can set the stage and talk about ORLADEYO and your pipeline.

Yes, sure. So BioCryst is focused on rare disease, and ORLADEYO is in its fifth year of launch for treatment of HAE, prophylaxis of HAE and growing really well. We're very, very pleased with performance and what it's doing for patients.

We have a pipeline as well with 2 programs in the clinic with milestones, regulatory milestones and trial milestones already this year and data for both before the end of the year.

And we're a company with financial strength. We expect to be profitable this year. We've paid down debt already this year, and we are capital markets-independent.

Got it. And with your lead drug, ORLADEYO, it's been commercial, it's doing really well commercially. First quarter, you guys beat expectations again, and you raised the guidance for the year to $580 million to $600 million versus the prior $535 million to $550 million. Can you talk about the drivers that led to the increased guidance?

And what are some of the key variables that investors should consider when determining whether you're going to hit the upper or lower end of guidance this year?

Yes. So driver is demand. There's strong demand for ORLADEYO amongst patients and with physicians wanting to give it to their patients, and for first quarter, also getting patients to paid therapy. So in particular, the Medicare population but also commercial population getting to paid therapy was a big driver.

In terms of variables going forward for the rest of the year, if we have continued strong growth and keep maintaining that paid rate, then we would -- we are going to see similar performance this year.

Got it. Okay. Makes sense. And also wanted to ask just about thinking about the expansion of the opportunity, and you guys have talked about the pediatric opportunity, and FDA has accepted the supplemental NDA with priority review, and you've got a PDUFA scheduled for September 12 of this year. Wondering what data you included in the data package, and do you expect FDA to ask for longer-term data? Have you gotten any feedback from FDA and also payers as well?

So we have had the NDA accepted, as you said, with the PDUFA date mid-September and priority review. The data package is -- it's the data that's needed to extend what we know for adolescents and adults into the pediatric population, so safety and PK as well as we have data on attack rate that's submitted. This is to meet the pediatric requirements. And so it's fairly straightforward to submit a dataset like that and have it reviewed by the regulators.

Got it. Okay. So wouldn't expect any surprises as it stands there based on some of the conversations. Same thing with payers as well, they'll be on board with this population of patients with pediatric?

We certainly hope so.

Yes. Okay. And wanted to dive into the pipeline where you do have 2 data updates later this year where there's a lot of interest. So you've got Netherton syndrome and DME. Maybe starting with Netherton syndrome, just remind us what the mechanism of action is for 17725 and what data that you've seen so far that supports your confidence in pursuing this indication.

So 17725 is a KLK5 inhibitor. We're pursuing this for the treatment of Netherton syndrome, as you said. In terms of the mechanism, the data is -- this is a genetic disorder, and it is actually pretty clear that faulty gene leads to faulty protein function, which leads to no control of KLK5. And so the missing piece is the KLK5 inhibition. And that is now in the clinic. It's in the clinic for evaluation. We've had healthy volunteer evaluation so far and expecting to go into patients.

Got it. And we've seen a few prior attempts for targeting KLK5 for Netherton. Maybe talk about those approaches where we haven't seen a lot of success. And how does your drug differentiate versus these prior attempts as well as the current competitors as well?

So this is an opportunity to inhibit at the top of a cascade. Let's talk about KLK5 as the target for this drug. There have been other programs that have looked at KLKs, KLK5 and others. There are also other programs that have looked at some of the inflammatory cytokines and the programs that look at topical therapy. For this disease, we believe that systemic therapy is appropriate in order to be able to get exposure throughout the body. It's a disease of severe skin disease, and it affects the skin body-wide, so you really need to be able to get something that is going to treat the whole person.

It also is a disease where KLK5 is the driver, as I've said, but it activates subsequent kallikreins, and it also activates other inflammatory molecules. If you stop that cascade at KLK5 with inhibition there, you would see then, this is what we expect, you don't need to stop anything further down the cascade because it will have been stopped at that top of the cascade. So it's really KLK5 inhibition.

It's one more piece I'll add, and that is for our program, this is a very potent drug. It also has very high affinity, which means that it sticks to the target and it sticks for the life of the target being in the skin. And that means we can give a dose, we think, every 2 weeks in order to give that effect of KLK5 inhibition throughout the turnover of the skin. And so this will be a subcutaneous dose of potent medicine about every 2 weeks.

Have you disclosed the half-life for what it is yet?

I don't believe we have. But here, what may be more relevant is the skin turnover. With the high affinity and the drug sticks to that KLK5 target that the skin is going to turn over about every 2 weeks, that means you shed, and you would want to dose skin about every 2 weeks.

Got it. Okay. Makes sense. And in the initial clinical experience, wondering if there's anything you can comment on on what you're seeing there. I think in the past, we've talked about whether you're seeing ADAs or any GI or respiratory tox. And is there anything else you're focused on as it relates to safety?

So we haven't seen anything that we've specifically disclosed, but what we have seen so far in the healthy volunteers is sufficient information and supportive data to allow us to move forward into patients. So you could expect that we've been looking at PK, we've been looking at safety. I don't have any data today on ADA, but we have what we need in order to be able to dose patients more than once.

Got it. And what can you say about the PK? Is it tracking so far with your expectations? And you disclosed you're going to start dosing at 6 mg subcu. How many more dose levels do you expect to explore in Netherton patients?

So what -- we have PK in healthy volunteers looking at plasma exposure. It's in line with what we expected it to be, which allows us to move forward into patients, as I said. We're dosing in patients at 6 mg per kg as the preliminary dose, and we'll have 3 doses over 4 weeks for those first patients. What we -- the difference in healthy volunteers and patients is that with -- what matters is going to be exposure in the skin, which is where the target KLK5 is. We can't measure that in healthy volunteers because KLK5 is not active. The blood -- drug won't bind to it. But in patients, we'll be able to measure that. So we'll be looking for PK as measured by the presence of the drug in the skin in patients.

Got it. Okay. Makes sense. And how often are you measuring drug activity with KLK5 suppression? And how long do you need to follow the patients to understand the healing effect with biomarker, IgA or IASA measures?

So in order to measure the drug in the skin, we have to have samples of the skin. So we're doing skin biopsy. And we're also doing an assessment of skin as a sort of shed. So there's something called skin taping. That, we'll do at baseline, and then we'll do a skin biopsy at least once and then the skin taping multiple times after. So we'll have several different time points to look at drug in the skin.

In terms of what else we'll see this year, so we are looking at the outcomes in the clinical setting, clinical sense, meaning we're looking for how the skin improves. We're looking at scaling, and is it decreasing? We're looking at redness. Is that improving? We're looking at itching. Is that improving? And so it will be a physician score measuring the quality of the skin scaling and itching. It will be a patient score also on how much does it itch.

Got it. And for the skin biopsies in your initial data update, is there more you can say on just how frequently you're getting those biopsies? I'm guessing at baseline and then how many times...

One additional skin biopsy, but we'll be following patients for a number of weeks. We'll be following in the Part 3 part of our study. We'll be dosing for 4 weeks and then following for about another 2 months after that. And we'll have periodic looks at the skin through the skin taping piece. It's like putting a piece of tape on the skin and taking off a few cells. The skin biopsy is more invasive. So we'll just do that once after dosing.

Got it. Makes sense. And anything else you're looking for and just based on blood biomarkers that are downstream from the KLK5 pathway?

We will look at -- in the skin, we'll look at PD markers, and that would be sort of downstream activity from the enzyme activity from KLK5. What I'm most interested in here is looking at the skin outcomes that -- what you can actually see in the skin and then matching it back to what we see on PK exposure in the skin and on that PD activity in the skin because it's going to be what do we see visually on our observation of the skin that really matters and tells us if we're at a dose that is having the effect we want to see.

Got it. And these patients, maybe talk about just the amount of surface area that's covered -- that's affected by the disease.

So this is a disease that affects head to toe. And one of the diagnostic findings of the disease is something called bamboo hair, so it affects the head as well. And the bamboo hair, just it's the term describing how it looks under the microscope. It's sort of broken in pieces. And so it's head to toe. It's the entire surface area. There can be some patches of skin that are worse than others, but patients generally exhibit this body-wide unlike some of the other skin diseases.

Got it. And so just based on like how quickly you think you'd be able to see -- detect some improvement in skin based on some of the accepted measures, I guess how do you think about just the rate of improvement and benefit for patients?

So number one, I don't know. Number two, with the rapid turnover in skin in patients with this disease about every 2 weeks, it may be fairly quickly that we see a response. And so we'll be looking at 4 weeks, 8 weeks, 12 weeks. What we know in the field is that there's been recent testing of a topical serine protease inhibitor in patients with Netherton syndrome and a response seen relatively quickly, I think, in under 6 weeks. And so we may see it that fast as well.

Got it. And maybe talk more about the study design and just the rationale behind the Phase I design. Why did you pick the 4-week treatment in Part 3 and 12-week treatment in Part 4? And do you expect to roll over Part 3 patients into Part 4?

So the study is designed so we can get an incremental look first in a few patients. Our target with the patients is to understand, one, is the drug getting to the skin in the quantity that we want it to do? Two, are we seeing healing in the skin as a result? And so 4 weeks of treatment will give us an opportunity to look at both of those and a glimpse that we'll get, is this drug getting to the skin, and then is it starting to heal?

What we need to know is, are we at the right dose? If we see skin healing with 4 weeks, then we know we're at the right dose or close to it. If we don't, then we'll go up in dose to take the data that we have from skin penetration but also dose up to be able to get to affect what we see in the skin. We may need to dose up before we get to the 12-week portion in Part 4 of the study. And if we do, then we'll dose up. Part 4, our goal is to confirm that we're seeing the findings in the skin, how long they last and confirm the dose. And what would happen next is that we may then move to a pivotal program or a confirmatory trial.

Got it. And for patients that roll over -- I guess, when patients roll over from Part 3 to -- or...

Yes. So patients can complete Part 3 and then be eligible for Part 4. It's not quite a rollover, but they could still participate in Part 4, yes. This is an ultra-rare disease, so every patient matters in your clinical trial program. And it's relatively short term to see something in the skin, and then we would have patients available to go into the next study.

Got it. And for an approvable endpoint, for how long do you think you would need to treat patients and see improvement? What are your thoughts on that and what just that duration would have to be?

Yes. So we'll have to have that conversation with the FDA and regulatory agencies, of course. I expect that we'll be seeing it within a month or 2. It may improve over time as well. As we treat and inhibit KLK5 at the top of that cascade I was describing, we would expect to see the inflammatory markers further down the cascade start to respond. And that may take a little more time. So we may see some skin change and less scaling of the skin, but the deeper inflammation could take longer.

And so for how long you need to study for a pivotal program, I don't know, but I would imagine it's at least a few months. Typically, the agency wants to see 6 or 12 months' data, and so it'll be somewhere in that time frame.

Got it. And for the Phase I, just in deciding whether to move forward to a pivotal, what do you want to see for biomarker and clinical healing data by the end of this year? I guess what's your expectation? And is there a good benchmark out there for reference?

Yes. So we're looking for a really big change. So this is a targeted treatment potent drug, a disease with no targeted therapies available and a very severe disease. We're looking for a dramatic difference. So what I would want to see is improvement in the skin and match it with what we're seeing in the PK/PD in the skin in order to then inform moving to a pivotal program.

If we don't see that this year, then we'll dose up, as I said, until we do. But the information that we're looking for then is, are we at a dose? And with that dose, are we seeing that dramatic change in the skin with healing?

Got it. And a lot of Netherton syndrome patients are infants and young children. What safety and efficacy data must be seen in this population to derisk the program?

This gives us an opportunity to include pediatric patients earlier in the program. We don't have to wait until registration. It's with a biologic therapy where the class is generally safer. It means that we may have an opportunity to dose down in age as part of our development program and to include in our registration dataset.

So we'll need to have PK data so we can judge the exposure that we need. And if the dose has to decrease, we'll also need to have some exposure and safety in adolescents and adults before we go lower in age. But we may be able to dose down to age 6 or so in this program and part of the development program before we eventually go for registration.

Got it. And so you have the data at the end of this year. Would you meet with FDA after that then to decide on what a pivotal would look like and then potentially start that pivotal study next year or...

Yes. I would expect the next step with the FDA would be to bring the data that we obtain in this study and then have a conversation about the path to registration.

Got it. Okay. Have you guys said if we're going to start the study next year? I don't think you've disclosed...

A pivotal study?

Yes, a pivotal study.

We have not, no. Yes, and so -- and it will depend on the data. If we need to dose up and dose range a bit, it will take a little bit longer. If we've hit the dose, which is not usually the case, then we could go sooner.

Got it. Okay. And for an accelerated approval path here, there's not clear precedent out there from our understanding. What do KOLs want you to do for this type of study?

Yes. So there's no regulatory precedent. There's no targeted drugs, nothing approved yet for Netherton syndrome. And that means that we have some negotiating to do around the endpoints. It's clear when we talk to physicians that they want to see skin healing. That's what matters to them and what they -- in their discussions with patients, what matters to patients.

When we've spoken with patients and I've had that conversation with the patient, they are most concerned about the skin scaling and the itching. And so I would expect those to be part of our pivotal endpoint, and those are the kinds of scores that we're building in early, but we'll need to understand with the agency if they agree with that.

In terms of accelerated program, this is a severe disease and ultra-rare. We expect a big difference. That's what we'll be looking for. And that means it could be a relatively efficient streamlined program. Whether it's accelerated or full approval, that will depend on discussions with the agency.

Are you bookending the number of patients that you could need for a pivotal study at this point? Or is it too early?

It's too early. But I think we can safely say that it would be relatively fewer than you'd see in other diseases. This is a targeted therapy, big difference is what I'm looking for, as I said. And so I would expect it's going to be smaller numbers.

Got it. And for enrolling a pivotal study, maybe just talk about some of the challenges there and how that could work within -- because it's a smaller patient population. What are you doing to plan for enrolling a pivotal study?

Yes. Ultra-rare populations are always something you have to think about carefully as you want to enroll in a clinical trial. Patients are few and far between. We are -- we've been working with a number of sites and experts and the experts who treat patients and have more than one, several patients.

And the sites that we're opening are those that have patients already in their patient base and may be relatively straightforward to find those who participate in the trial. It is absolutely necessary to be talking to the investigators, the KOLs early and be working with the ones who know the disease best. They'll also have the biggest patient base.

Makes sense. Is there a good reference study out there for investors to get a sense of what enrollment time lines could look like?

So they're always going to be different. I don't think I can point to a reference study for this. But it is -- just one more point on that, Maury. This is what we do. We are -- we work in rare disease and have for years. And we're very familiar with what you need to do to be able to understand with investigators how best to enroll patients in the trial.

Got it. Makes sense. And for the market opportunity, you've estimated about 1,600 Netherton patients in the United States based on the bamboo hair phenotype. And there may be up to 5,000 patients if we consider a subset with the ichthyosis patients. Based on your research, how big is the Netherton syndrome market in the United States? And what percent can 17725 address?

So with targeted therapy, we would expect it to be something that maybe many patients would be interested in. I can't give you a percent, but this would be the opportunity for them to have something that actually treats the source of the disease.

In terms of the market size, it's -- I mean, it's hard to say. That 1,600 that you mentioned, that's taken from claims data looking at a clinical symptom. And it's hard to know how many patients didn't present with that complaint, didn't get tested by their physician and yet still have the disease. And so we do expect that the recognized patient population may grow as a targeted therapy becomes available and physicians do the genetic test and identify that a patient who's perhaps known as having ichthyosis, in fact, has Netherton syndrome as a cause of the ichthyosis.

Got it. And can you talk just a little bit about the spectrum of severity for the disease and what the drivers are there?

Yes. There is a range of severity. We understand that the most likely patients to be diagnosed are those who are most severe and may spend time in sub-subspecialist office. The reason behind it is the genetic variability. There's a mutation that can be in different places in 2 genes or a pair of genes that any patient has and something called a compound heterozygote, which means mutations in different places, and you may get different expression of SPINK5 protein.

And so that translates into patients who may have quite severe disease and patients who may have less severe disease but still look like they have bad eczema. So they're seeing a dermatologist but not necessarily tested and identified as having Netherton syndrome.

Are -- the initial patients that you're going to enroll, are they the compound heterozygotes?

So we're looking -- maybe, and I'm sure it will include some who are. We're not enrolling based on their genetics. We're enrolling based on their skin disease and having had severe and recognizable skin disease.

Got it. Okay. That's helpful. And for patients that have this, especially kids, they'd likely be on therapy for their whole life, right? It's genetic-based disease.

Yes, it would be continuous treatment.

Right. Makes sense. And so I want to shift gears and talk about -- well, actually, one other question, too. For 17725, are there other indications you could pursue with the drug?

That's an interesting question that I'm not prepared to answer at this point. KLK5 is expressed in other tissues. The reason we chose Netherton syndrome is because it is solely KLK5 that is the source of the disease. But if we are able to demonstrate that this drug is safe, we identify a dose that's effective in Netherton syndrome, then we may move to other diseases as well.

Got it. Okay. And so for DME with avoralstat, you've got a lot of experience with avoralstat, which this drug has lower solubility than ORLADEYO and could be ideal for the suprachoroidal approach that you're pursuing in DME. What evidence either from literature or ideally from clinical kallikrein inhibition experience gives you confidence in the mechanism for DME?

So there's actually a fair amount of evidence. We're looking for the clinical evidence of this program. There is literature that supports that plasma kallikrein is expressed in the fluid inside the eye in a number of patients with DME, in fact, a wide range of patients with DME.

And VEGF is also expressed but not in all of those. And there's some overlap between the 2 but then also patients who have one or the other. That suggests that VEGF -- it actually supports why VEGF inhibitors don't work for all patients and suggests that plasma kallikrein may be an alternative mechanism.

There's also -- there have been some programs that have assessed plasma kallikrein inhibition in the clinic, and they've had some initial results that are really interesting. They're just not sustained. And so it's more durable exposure at the site of the retina that's probably what's needed, and we think we can bring that with avoralstat.

Because that's what you're doing with your approach. You're getting that durable exposure at the retina versus the other approaches, which could have been systemic or...

Yes. I think there's been oral delivery and there's been intravitreal delivery. The suprachoroidal space is right around the back of the retina. And putting avoralstat, which is poorly soluble, as you said, in a suspension into the suprachoroidal space and allowing it to slowly solubilize over time, that would give, we think, a sustained slow release of the drug, almost like a depot, and deliver exposure right to the retina so that you have sufficient exposure in the right place for the right amount of time for a long duration so that one injection could get to the level of improvement that we want to see in the edema.

Got it. And talk about the preclinical data you have so far? And how does that derisk translatability to humans in terms of dose, efficacy and then safety and durability?

So we're really excited about the preclinical data because it is so very clear. We have data that's been in some of our presentations on our website showing that suprachoroidal dosing with avoralstat in an animal model, in a VEGF-dependent animal model has a fairly rapid and significant decrease in leakage in the retinal vasculature.

So what that means is in a VEGF model, plasma kallikrein inhibition alone with avoralstat delivered to the suprachoroidal space, the same route that we're talking about in humans, has a clear definitive reduction in retinal vascular leakage. And that's the source of diabetic macular edema, is that leakage in the vasculature. So that gives us confidence going forward.

We also have data that shows exposure can last past 6 months with one injection in a similar model. And that puts us in a position to go into the clinic then and assess for the same thing. If we give avoralstat with an injection in the eye and the suprachoroidal space, does that one injection have exposure and durability of exposure out to maybe 6 months? And does it also have that effect that we want to see in retinal thickness, retinal edema, which is easy to measure in the clinic?

Got it. All makes sense. And that's a good segue to the clinical study that you're running. So maybe talk a little bit more about the Phase I study design. And what do you want to see in this study in the first few patients that you show at the end of the year? What's the bar for success? And what do you want to be there?

So we have -- this will be a relatively small study. It's a first look, it's a small investment, but it is looking at 9 patients at 3 different dose levels, so dose escalation, dose ranging. And we are looking for safety and tolerability first, but we are also within 4, 8, 12 weeks looking for changes in retinal thickness. That's easy to measure. It's noninvasive. It's just an assessment of the thickness on scan.

And that thickness, if it starts to change in that 4-, 8-, 12-week time frame, that tells us we have a drug. And it becomes a drug then that we'll want to think about investing more to do further evaluation. So this is a first look, a small look, but it will give us an idea of, are we seeing a difference in the retinal thickness?

Got it. And how many time points will you be assessing that then and...

So pretty regularly, about once a month. And we'll actually -- we have the opportunity to assess for a number of different months. So if we start to see something, we'll continue watching and then think about our next trial.

Got it. And maybe just going back to kind of the financials and operations, you guys paid down $75 million in Pharmakon debt this year, and you expect to be EPS-positive this year. Can you remind just on what the cash position is and talk about -- what else you guys could do having a strong balance sheet potentially on the BD front?

Yes. So we expect to be net income and cash flow positive this year. Cash at the end of Q1 was $317 million. Now it's about $240 million, and debt remaining, since we had the ability to pay some down, is $249 million. Our plan would be to continue to pay down debt and clean up the balance sheet, get us into a sound financial position and then continue to invest in our pipeline, both internal and perhaps through BD external.

Got it. And for the 2 pipeline data updates later this year, are they going to happen at different times, at the same time? Any more clarity on just -- or granularity on the timing of these events?

I don't -- I can't say that. I think by the end of the year, we'll have both.

Got it. Okay. Well, Helen, thanks so much for joining us today.