BioCryst Pharmaceuticals, Inc.

and welcome to the Biochrist second quarter 2023 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event's being recorded. I would now like to turn the conference over to Mr. John Bluff with Biochrist. Please go ahead.

Thank you very much. Good morning and welcome to Biochrist second quarter 2023 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 John Stonehouse, CFO Anthony Doyle, Chief Commercial Officer Charlie Geyer, and Chief R&D Officer Dr. Helen Thackeray. Following our remarks, we'll answer your questions. Before we begin, please note that today's conference call will contain forward-looking statements, including those regarding future results on audited 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 applied 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 pro forma 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 biocrist.com. I'd now like to turn the call over to John Stonehouse.

Thanks, John. The strong step up in revenue that we expected and achieved in the second quarter and the consistent steady growth we continue to see in patients on treatment positions us well to achieve no less than $320 million in Orladeo revenue for the year and $1 billion at peak. Charlie will share more of the details, but I want to point out the success Charlie and his commercial team have had in a rare market where there are many treatment options for patients, and yet they're still switching to Orladeo. That is great execution by the entire team. Charlie and I also recently attended the USHAEA Patient Summit in Orlando, Florida. This was the first major gathering of USHAE patients since 2019, which was before the approval of Orladeo. A record 1,200 HAE patients and their families were in attendance, and it was an amazing opportunity for us to showcase our company and make connections with this community. Patient activation is a major part of our strategy, and this event was a fantastic launching pad for that. Lastly, we're very excited about the progress we're making with our pipeline. We will host an R&D day on November 3rd at our labs in Birmingham, Alabama. We plan to show you much more about additional assets and programs we haven't discussed previously. Our hope is you will see more clearly how our structure-based drug design platform focused on pursuing first-in-class or best-in-class medicines for patients with rare disease, allows us to spread the inherent risk of drug discovery across multiple programs, targets, and diseases, and increases our probability to get at least one of them to the market to follow the success of Orlodeo. We look forward to sharing more with you in November. Now I'll hand it over to Charlie.

Thanks, John. Second quarter results for Orlodeo rolled out as we expected. The long-term linear growth in patients on therapy continued, and revenue jumped following the first quarter prescription reauthorization process. I'll provide more color on both. Growth in patients treated with Orladeo continued at the same consistent pace we've seen over the past two years. After a strong first quarter in the United States for net patients added to therapy, we added about the same number of patients again in the second quarter. I noted at the last earnings call that we had crossed 1,000 patients on therapy in the U.S. As you would expect, we are above that total now. This is what linear growth looks like. We also made great progress in getting patients to paid therapy, adding the most net paid patients in a quarter since Q2 of last year. In fact, we added the exact same number of net paid patients as a year ago. We also had a very similar number of discontinuations as in the second quarter last year, even though our current patient base is significantly larger. So the discontinuation rate continues to go down. Again, linear growth. As we forecasted, revenue took a substantial jump in Q2 over Q1, just like it did a year ago. The biggest driver was the continued growth in our patient base, but we are also improving our ability to get patients to paid therapy. In January and February, for example, roughly 34% of patients were on free product during the heavy reauthorization period. That fell to about 32% by the end of March. By the end of Q2, the percentage of patients on free product fell to 30%. So we made a lot more progress after reauthorizations were completed. Every percentage point of our current patient base that we moved to paid therapy is worth about $4 million in annual revenue. So these improvements are very meaningful. Based on the trends we see and the work our team is doing, we expect to see continued steady improvements in that percentage over the next few years. We're confident we will reach our long-term goal of getting over 80% of US patients on Orlodeo to paid status. The bottom line in the US is this. We are growing total patients on therapy at a very consistent rate every quarter, just as we have done since launch. and we're getting even better at moving patients to paid therapy. For the rest of 2023, we expect revenue to track along with steady patient growth to reach no less than $320 million in global revenue for the year. In future years, you can expect the same pattern based on patient growth trends and insurance seasonality. Q1 revenue being slightly down based on reauthorizations, Q2 being a larger bump in revenue, and steady growth in Q3 and Q4. The US currently accounts for about 90% of global sales, but this may overshadow how well we are doing in Europe and the rest of the world. What we are seeing right now in Europe is very similar to the US, steady quarterly growth in patients on therapy. We are laying the groundwork for similar patient growth trajectories as we launch in more and more countries around the world. on the way to 20% of peak global sales coming from markets beyond the U.S. As John said earlier, we recently attended the USHAEA Summit in Orlando, along with 1,200 patients and their family members. Their interest and enthusiasm showed us how much demand there is for an oral, once-daily prophylaxis therapy. We are seeing the same thing around the world. Our teams and our partners in North America, Europe, Latin America, and the Middle East are doing phenomenal work to bring Orladeo to patients who need it. We keep growing and we keep improving. I'm so proud of our global teams and how they're bringing this transformative therapy to patients living with HAE all over the world. Helen, I'll turn it over to you.

Thanks, Charlie. It was exciting to hear from so many patients at the HAEA summit about how Orlodeo has controlled their attacks and changed their lives. HAE is a hereditary disease passed down from parents to children, and we spoke with many parents who wanted to know what progress we are making towards bringing Orlodeo to the pediatric population. The burden of HAE, and in particular the burden of injectable therapy, is especially difficult for children. That is why we're focused on a future pediatric indication with oral once daily or LIDEO in the APEX-P trial, including evaluation of a new formulation using granules to best meet the needs of children with HAE. APEX-P is up and running at multiple sites, and I'm pleased to note that enrollment is proceeding as expected. Turning now to the pipeline, we're looking forward to our R&D day in November. where we'll share with you details on new programs and molecules that you haven't seen before. Our goal with our pipeline is to bring first-in-class or best-in-class molecules to patients with rare diseases and to have a second product and more following that, which we bring to market, as we did with Orlodeo. As we focus our investments across multiple molecules, targets, and rare diseases that meet our criteria, we are diversifying risk by adding to our options in discovery and early development. Adding these options then increases our overall chances for success in achieving that goal of bringing additional products through registration and to patients. As you've seen, we are also disciplined about decisions to invest in later stage products, which are proportionately more expensive. We won't accelerate R&D spending for a pivotal program until we have clear data that we are likely to have a first-in-class or best-in-class molecule. This is our approach with BCX10013. We want to see data that shows BCX10013 is an oral factor D inhibitor with once daily dosing, excellent safety, and efficacy that is as good or better than the other options for patients. If the data show BCX10013 has this profile, This is the profile of a best-in-class molecule, and we will invest to run pivotal trials and bring it to market. If the data show we don't have a best-in-class molecule here, we'll stop development. It is early, and there's still plenty of unknowns with the BCX 10013 program, but we do have two updates to share with you today. We have restarted dosing in our multiple ascending dose trial in Healthy Volunteers to add another dose level. We have previously evaluated multiple doses up to 80 milligrams and also single doses of up to 110 milligrams where we saw excellent durable control of the alternative pathway at 24 hours post dose. These data support proceeding with evaluation in patients. Now we'll take our healthy volunteer dosing higher to refine our model, our PK model data set with daily dosing at 160 milligrams for 14 days. This is in parallel to the work we'll do in patients to obtain more robust information for our PK model and eventually inform final pivotal dose selection. We're now also proceeding with our dose ranging trial, BCX10013, in patients. We expect to begin enrolling patients by the end of the year with initial data available next year. We are conducting this trial in patients, and we have chosen to work in PNH, for evaluation of both alternative pathway activity and clinical outcomes to determine if we have a safe, effective, once-daily dose that meets our criteria to move forward into a pivotal program in renal complement-mediated diseases like IGAM. Before BCX10-013, or beyond BCX10-013, we continue to build and advance our early pipeline as we invest in discovery for new targets. We're now ready to share our exciting progress with a growing pipeline of molecules, and we look forward to doing this at our R&D day in November at the Biochrist Discovery Center of Excellence in Birmingham, Alabama. Now I'll turn the call over to Anthony.

Thanks, Ellen. With global Orlodea revenue for Q2 coming in at $81 million, we saw the step-up that we anticipated from Q1. Based on this strong second-quarter revenue performance and continuing underlying patient growth, And similar to last year's quarterly cadence, we anticipate that revenues will increase slightly in the third and then again in the fourth quarter. Year-to-date, oral data revenue is at over $149 million. We expect revenue in the second half to come in at approximately $171 million, or an average of $85.5 over the next two quarters. And we're confident that we will achieve our revenue guidance of no less than $320 million for the year. You can find our detailed second quarter financials in today's earnings press release, and I'd like to call your attention to a few items. Total revenue for the quarter came in at $82.5 million, $81 million of which came from Orlodea. Of that $81 million of global Orlodea revenue, $72.8 came from U.S. sales with the remaining $8.2 million coming from ex-U.S., increases of 24% and 26% over Q2 of 2022, respectively. Operating expenses, not including non-cash stock compensation for the quarter, were $90.4 million, flat to Q2 of 2022. R&D investment for the first half of 2023 reduced significantly compared to the same period in 2022, and we expect that trend to continue, and that R&D investment in the second half of 2023 will be lower than in the second half of 2022, even as we factor in the additional trials for BCX 10013 that Helen discussed, and continued investment in our pipeline that we will share more about at the R&D day in November. We reiterate our full year OPEX guidance at $375 million for the year, flat to prior year. Cash at the end of the second quarter was at $415.7 million. That includes net proceeds of $26 million from the Pharmacon refinancing that we closed in April, a deal that moved our debt repayment date out into 2028. gave us greater access to capital, and improved our terms. Net operating cash utilization for the quarter improved from $28 million in Q2 of 2022 to approximately $13 million last quarter, primarily driven by our increased revenues. Gap earnings per share for the quarter were negative 40 cents. That includes the impact of an approximately $29 million debt extinguishment charge following the refi with Pharmacon. Adjusting this one-time charge out on a pro forma basis, earnings per share came in at approximately negative 24 cents for the quarter. With the continuing strong performance of Orladeo as we move towards our 2023 goal of no less than $320 million and onwards to peak sales of $1 billion, OPEX flat to prior year while continuing to invest in advancing our pipeline, all combined with our strong capital position, we're in great financial shape to generate value as we move the company forward. Now, I'll pass it back to John.

Thanks, Anthony. So we had a great quarter, whether it's the Orla Dale performance or the advancing of the pipeline, and that is a direct result of great execution, and so I want to thank the BioChrist employees for that. We plan to report Q3 earnings on November 2nd from Birmingham the day before our R&D day, and we are very excited to host some of you at our labs in Birmingham, Alabama. We've got limited space, so the rest of you will be able to participate via webcast. Some of you may be asking why are we holding this on a Friday afternoon in Alabama, and there's two main reasons. One, we found that when you're there and have hands-on seeing what we do and how we do it and meeting our scientists, you have a better appreciation for what we're capable of doing. And the second reason is Saturday, the next day after For those of you who are college football fans or not, there's a pretty important game down the road in Tuscaloosa where LSU is coming to play Alabama. So we look forward to hosting our R&D day on November 3rd in Birmingham, Alabama. And that's it for our prepared remarks. We're now going to open it up for your questions.

Thank you. We'll now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone. If you're using speakerphone, please pick up your handset before pressing the star keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Our first question comes from Tasin Ahmad with Bank of America. Please go ahead.

Hi, guys. Good morning, and I'll start looking for flights to Alabama. I wanted to maybe get a little bit of color on how you're thinking about the second half of the year for Oladeo Trends. Now, you were specific about saying that you expect to see some growth in the third and fourth quarter. I think people would be interested in knowing how your growth, which is very strong, could turn into outsized growth in coming years. And where do you see your areas of real unmet need now that you're fairly mature into this launch? What are your focus areas for your marketing team, for example? And where do you think most of the upside is going to be coming from? Thanks.

Sure. I can take that. So first of all, the question about the second half of this year. So we expect the revenue to go up at the pace of the additions of patients on therapy. So as I've talked about, we've had really consistent growth in patients on therapy. So that's what's going to drive the growth in Q3 and Q4, just as it's done since launch. And as far as your question about the unmet need, the opportunity, what we know is that all things being equal, the great majority of HAE patients would rather treat their disease with one pill once a day. And so the unmet need is to get all the people who haven't tried yet to try Orladeo. And a lot of those are patients who are taking other prophylaxis therapies, injectable prophylaxis, So we're going to keep focusing as a number one priority on giving them the chance to switch over and try Orladeo and seeing how much more they can benefit by treating their disease with an oral drug.

Charlie, I'd add, you know, when we were at the patient summit in Orlando, one of the things that we had a challenge with at the launch was patient activation because of COVID. And And what we heard from patients is, you know, this is the first time they were aware that it was approved and available to them. And I think the more that we get going to zine, I think that's potential for continued growth. But the bottom line is there's a lot of good drugs out there that people are controlled on. And so it's tackling it, you know, doctor by doctor, patient by patient, to get them to want to try it because if it works for them, it's way better than injecting yourself.

Okay, John, thanks for that. You know, you have reiterated your confidence in reaching a billion dollars in peak. Do you have a sense of how long it would take from where you are now to reach that goal?

So I think what we've said before, we'll say again on this, is you can draw a line between, you know, our year one revenue of about $122 million, $250 last year, and $320 this year. And that will give you a pretty good sense of when we expect to get to a billion dollars. It'll take some more years based on what John was just talking about. It's, you know, moving this market takes a while. But everything we see in our forward-looking market research, as well as the results that we're putting on the board, gives us great confidence that we're going to get there.

Yeah, and that line crosses a billion around the turn of the decade. And remember, we have patent protection out to 2039. So we've got almost another 10 years of protection at peak. So that's real value.

Thank you. You're welcome.

Our next question comes from Chris Paymont with Piper Sampler. Please go ahead.

Good morning. This is Nicole Cabresquion for Chris. Thanks for taking the question. Maybe just around the 10.0.13 program, I know you guys are going to evaluate a higher dose in healthy volunteers. I guess just any color around maybe how that translates to the dose in preclinical models where you observe the chronic tox signal. And then just to clarify, I guess, have the chronic tox experiments been completed at this point?

Yeah, good morning. So I'm going to take those in reverse order. In terms of the chronic tox, we had a chronic tox program. It's still ongoing, and we don't expect that to complete until later in the year. In terms of the information and translating that to effect, what we know is from healthy volunteers where we see that the clinical complement pathway is inhibited to greater than 97% at 110 milligrams, and we need to go into patients and we'll do that with our patient trial in PNH to assess further information around complement inhibition at that and dose escalating as well as then how that translates into clinical outcomes so that we can confirm the dose.

But I think at the end of the day, Nicole, it's all about what do we see in humans and do we have a safe and effective dose that's once a day. So that's the whole point behind that trial.

Yep, got it. And then just really quick, I know last quarter there were some unanticipated headwinds with the lack of funding from some of the external charities helping to provide co-pay for patients on oral Adeo. I guess, where does that situation stand currently?

So, the situation has stabilized. So, we are not losing more patients or having patients having to drop back to free product since the first quarter. Those that we did put on long-term free product in the first quarter have to stay on it for the rest of this year. But for now, the situation is stabilized.

Yeah, and I'd just make one big plug for Charlie and his team. Despite that, they're making great traction or having great traction in converting patients from free product to paid. As he said, it was at 34%, and now it's down to 30%. My expectation, I think Charlie's as well, is that that's going to continue to go down.

Great. Thanks for the call.

Our next question comes from Stacy Cook with TD Collin. Please go ahead.

Thanks so much for taking our questions. We have a few follow-ups. First, regarding 10.0.13. that additional cohort. Was this a request from the FDA or just the next natural step in your development for this program? And then regarding the potential range of doses for the global PNH study, willing to provide some details there. And I know you've discussed data next year, but their potential to get a sense of the safety profile any earlier. So those are our questions on kind of the pipeline. And then Regarding Orla Deo, I know you've in the past not discussed exactly the size of the Salesforce, but now that you've increased it in Q4, could you just talk about the relative sizing versus other competitors like Takeda as you think about expanding potential efforts and maybe community settings and clinicians that really only treat two to three patients? Thanks so much.

So if you want to take the 10.0.13 and Charlie, you can take the Salesforce.

Yeah. So 10.013, the dose that we're adding with the healthy volunteer trial, the 160 milligrams, that is for our own purposes. That is so that we can assess mostly PK from that dose level and build it into our PK model. We'll need that once we have our patient data in order to confirm the final dose for pivotal trial initiation. And so that's why we're adding that dose level. In terms of the range of doses, then, that we're looking in the PNH trial, We'll be starting at 80 milligrams and dosing up from there. What we're looking for is complement activity. We're looking at that for multiple doses and in the disease state. We're also looking then for clinical outcomes, and we're trying to assess then for safety, but more importantly for efficacy, and that in the PNH in the population setting will be in clinical outcomes like looking at hemoglobin and LZH.

And Helen, it might be good to just talk about roughly how many patients do you think we need for that study to get a sense of that, and how long do we need to follow those patients to get a sense of the safety, at least in this initial study?

Yeah. So that's a small study. We don't need many patients, and that's one of the reasons to assess a complement inhibitor in patients with PNH. You can dose escalate, and we will be doing that within individual patients, and each one will be giving us information on then how that patient's complement system is affected and their own clinical outcomes and dose escalating with that information. So not very many patients, small trial. In terms of the safety information, we'll be looking at that as we dose up as well. And so we'll have, again, in individual patients, the ability to observe safety across a range of doses.

And three months, six months, 10 to 15 patients roughly?

Yeah, it's pretty small. And it's, you know, four to 12 weeks to have a first outcome. Great.

And then on the, the, the sizing of the Salesforce, um, what I've said before is that our, our teams between, uh, kind of right in the midpoint between 30 and 50 people, I've never said the exact number. Um, but, um, at the beginning of the year, we did add a few sales territories. The, um, the biggest thing though, that we did is double the number of our regions. So it gave our regional managers or regional directors more time to spend with their teams and with key customers. So when we build our sales force, the number one thing we look at is the market potential in terms of HAE prescribers out there. And so we build it on a workload basis for each sales rep so they can be efficient. But we also do look at what best we can tell what the competition is doing, and we think that our team is sized very comparably to them.

And, Charlie, it's not just the rep, right? What we hear from docs is that they see somebody from Biochrist every week, and so you might want to just talk about the whole team.

So simultaneously what we do is we have a market access team out in the field, so we've built up that team. We've expanded our patient services team so that they work closely with patients but also with the practices. And then, of course, on our medical side, we've got a very excellent medical team out there. working to educate physicians. So we look at the whole package, and as we do our market research, yes, we get feedback that they're seeing BioCHRIS people the most frequently.

Very helpful. Thank you. Welcome.

Our next question comes from Brian Abraham with RBC. Please go ahead.

Hi, everyone. This is Nevin on for Brian. Congrats, again, on a good quarter. So I have a couple questions about the efforts that you guys are taking to convert free drug patients to paid drug. Can you talk about some of the efforts there in regards to patient education and simplification of some of the paperwork that's been mentioned on previous calls? And then also, if you could speak to some of the gross to net trends of the quarter and some of the recovery into future quarters as well.

Sure. Yeah, on the conversion from free drug to paid drug, the place where we've made the most progress is within the commercially insured market, which is the largest portion of our business, a little over 60%. And the number one thing, as you're alluding to, is is making sure that we are working with customers to get all the complete paperwork. So what that means is for a new prescription coming in, that the start form is complete. We've got the lab tests, we've got the clinical background and justification. If we get that all complete upfront, the insurer is much more likely to approve the claim. Likewise, anyone who has been on free drug going back and doing a really comprehensive appeal, letter of medical necessity, putting in the whole patient and family history is critical to the insurers changing their mind. And as our team is more and more focused on this and helping educate healthcare providers in particular, we're seeing more and more success in getting people moved over to paid product. On the gross to net, gross to net, that's a part of What happens in the first quarter where your revenue goes down a bit, one of those factors is that we take, on our commercial side with our copayment assistance program, the biggest hit happens in Q1 where many patients get up to the point of their out-of-pocket maximums are exhausted, and then that normalizes in Q2 and for the rest of the year. So gross to net was as bad as it's ever going to be in Q1, and then it normalizes for the rest of the quarters.

Yeah, and to frame that up, what we said in Q1 is that it was at the higher end of that 15% to 20% range, and we had expected that in Q2 it would come into the lower end of that range and then maintain that throughout the year, and that's exactly what we saw happen.

Okay, thank you. And then if I could also ask about the retention rate of patients who are on the drug. You had mentioned that the same number of patients who dropped off despite the higher, I guess, the higher denominator there. And so what do, are those retention rates, and in regards to the retention rates, are they kind of the same in the U.S. and ex-U.S., or are you seeing any differences in what those rates look like in those geographies?

Yes. Great question. So what we're seeing at this point, and we've got a lot of history now that gives us confidence in saying this, is that the pattern of discontinuation is very consistent. So when a patient starts in the U.S., a patient starts on therapy, about 60% of them make it to one year, and then we lose very few people after a year. And so what that means in the U.S. market is every month as we're getting a consistent number of patients coming onto product, we can predict how many people are going to drop off and our base is growing. So the absolute discontinuation rate as a proportion of our base keeps going down. XUS, we're seeing the same pattern of when people discontinue, but actually the overall retention rate has been better. And we think a lot of that has to do with just the, in Europe you tend to have larger HAE treatment centers where the healthcare providers are very focused on their patients and maybe just generally providing better education. Overall, the key to retention is, and we're very focused on this, is setting expectations with patients so that they know what to expect in those first few months of therapy. And if they hit any bumps, then they don't they don't panic and drop off therapy. And we've seen that that has been very effective, and I think that's why we've got this stable pattern that we're seeing now. Okay, thank you all.

Our next question comes from John Waldbein with J&P Securities. Please go ahead.

Hey, good morning. Thanks for taking the questions. On the free drug dynamic, Charlie, you mentioned the goal to get to at least 20% or less on free drug. I'm wondering when you think that could happen. And then with the guidance for the second half of the year with steady revenues between 3Q, 4Q, should we expect any movement on the free drug status in the back half of the year? If you're seeing steady patient ads and steady revenue, it seems like that should be stable. But I wonder if you could talk a little bit about those two points.

Sure. Yeah, so kind of the second question, yeah, we expect to make just continued incremental progress in the second half of the year, getting people to pay drug. It'll contribute, but I think the patient growth is really what's going to drive our sales growth the second half of the year. As far as when do we expect to get to the 20% or better, it's going to take a few years to get there. But the early, as we're really focused on this, what we're seeing in the last few months is new patients starting on therapy are already getting to an 80% plus paid rate. And so that gives us that confidence that over time we're going to be able to get everyone there. So I think it's the team focus, you know, our patient services team, our market access team, our sales team working to educate patients and healthcare providers about this. and continue to work with payers. All of that together is what's making the difference. Got it.

In XUS, you mentioned things are going well. Wondering if we should expect to see an acceleration at any point, if there's a tipping point, or is this going to be a grind higher as well there, and maybe a little bit about if it's going to be certain countries contributing the most, or is this going to be consistent geographic expansion driving the revenue at XUS?

Yeah, I wouldn't expect a tipping point or acceleration. We're really seeing the same pattern of patient growth. You know, as we've talked about, it takes a good four patients ex-U.S. to add up to one U.S. patient just from a revenue perspective. We will keep adding. So the steady patient growth is the number one thing. We'll keep adding countries. So we expect next year to launch in our wave two of Europe, so countries like Italy and Spain and Benelux. So we'll have those continued additions to our revenue stream, but I wouldn't expect a big inflection point. Steady growth.

Thanks, Charlie. Appreciate the call.

Yep.

Our next question comes from Justin Kim with Oppenheimer & Co., Please, go ahead.

Hi, good morning. Thanks for taking our questions. You know, maybe just a quick one first and then a commercial. As you think about the additional data being accrued for PNH, can you just discuss how those results may inform IGAN and whether you think the clinical bar might be lower in terms of the alternative pathway inhibition required perhaps due to the nature of the disease or competitive bar? And then maybe on the commercial front for Charlie, could you just update us on the mix of growth you're observing, whether those patients being added are naive to prophylaxis or experienced, as well as coming from high prescribers versus low-volume prescribers? Thanks.

Sure. So, on the P&H question. What we need to understand next is the dose that gets us to efficacy. So we're looking for a safe dose that is effective and that's measured by both the effect on the complement pathway and then the clinical outcomes. We're looking at that in PNH because that is an excellent opportunity to understand fairly quickly with a small number of patients whether we're getting to rigorous complement inhibition and the clinical outcomes that translate. And we know what we need to see. to demonstrate a dose that is achieving both. We would expect that dose then to translate to other diseases and we're treating the PNH opportunity as one that we would assign, we would sort of achieve and understand the pivotal dose and then take that into IgA and in other diseases. And we are, as a reminder, we're looking for, a differentiated drug to take forward. We're looking for safety and efficacy that's as good or better from what we're seeing in the field of complement inhibition, and we're looking at that with once daily dosing.

And that's what others have done in the field with alternative pathway inhibitors, so this is a new ground.

And then on the patient and prescriber mix, Justin, again, the story is consistent patterns. So still about 50% of the patients are coming from other prophylaxis products, and the other 50%, at least best we can tell, were not recently on a prophylaxis product or were completely prophy naive. So it's great to see that consistency. And then on the prescriber mix, we get a little more than half of our prescriptions from those top 500 doctors that I've talked about, the ones who treat about 50% of the market, and then we get a little less than half from the larger group of other physicians. And what's great is that every quarter we're seeing a very consistent number of new Orlodeo prescribers being added. So we continue to go broader into the prescriber market and then deeper within existing prescribers.

Okay, great. Thanks so much.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then one. Our next question comes from Serge Bellinger with Needham & Co. Please go ahead.

Hi, good morning. A lot of questions have been asked at this point, so maybe a couple around the HAEA summit that was held recently. Maybe just talk about the level of awareness of Royal Labeo within the patients that you met there and whether you've seen, you've experienced any tailwinds from attending the meeting, maybe some additional enrollment in the Quick Start program.

Yeah, Serge, as John said earlier, we did, you know, first of all, we had a big presence there and this was our first time attending the since we've launched Orlodeo. And so we had a booth there. We actually had two booths, both a branded and an unbranded booth. A lot of patient traffic coming through our booth, a lot of great conversations. And it's always a little frustrating, but when a patient says, oh, is this drug launched? But we did hear that. And so it's great. Now they know Orlodeo is on the market. And You know, as we said, 1,200 patients and family members, they all left knowing that Orlodeo was on the market. So what we're telling our healthcare providers out there is that this conference just happened, and they may be getting patients coming in and asking different questions about their therapy and that Orlodeo is – they may have questions about Orlodeo. So we'll see if we get a tailwind, but it was definitely an important – And it was great to see the community again and just to see their excitement of just them getting together again. It was a really great meeting.

I think, too, it's like the first of what I hope will be a bunch of patient meetings regionally. All that stuff stopped. with COVID. And, you know, so a certain state, a certain part of the country, they gather. And I think the other thing is people reconnected. It's like watching a family reunion, honestly, and the word of mouth spread, you know, because we got an equal number of people that came up to it and it's like, oh my God, Orla Deo has changed my life and let me explain to you why. And so when they're talking to other patients about that, I think that's going to be helpful too. And then the last piece was you know, the KOLs are there as well. And it's just a different dynamic at a patient meeting than when you go to the college meeting or quad AI. And so, you know, we're able to show up in a way that differentiates us maybe from our competition. And I think it's a chance to really reinforce and connect with the KOLs in a way that maybe is harder in other settings. So it was fantastic.

Our next question comes from Deepak Mathivanand with Barclays. Please go ahead.

Sorry. I think this is Tony on for Gina Wang. Another quick question. I'm kind of on 10.013. What initial data would warrant potentially further development and what could we maybe expect to see at R&D day on this or even other new pipeline assets?

Yeah, okay. So with 10.0.13, we are looking for something that's really quite straightforward and I think will be quite clear. We're looking for data to show that we're seeing the activity levels we need to see and the clinical outcomes that we're looking for in patients. And we're looking for that in a manner that's also safe. So it's fairly simple. We're looking for safety and efficacy that's as good or better than what is available to patients. And we're looking for that then with once daily dosing. Once we see that and have selected the dose program, that's the point at which we would be making the decision to further invest and initiate pivotal trials. Okay. In terms of R&D day, we'll update across the pipeline there. We have a number of things that we've been working on, and I'm really excited and pleased with what's been happening in the discovery and early programs in Birmingham and within the company. So it's sort of breadth and depth of the pipeline that we'll be discussing there.

Yeah, and I doubt there'll be any new information on 10.0.13. At that point, this will be stuff you've not heard of before.

Okay, got it. Very helpful. And I guess another quick one on Orla Dale launch. I know there's been a lot of questions already. Is there anything that could lead to sales kind of exceeding guidance for 320 either in terms of the retention rate or new patients or patients switching?

We're really confident in the 320 number. And, you know, based on what we're seeing, I think that's what you should expect for this year. So, consistent patient growth, incremental progress on getting patients over to paid therapy, and that same pattern that I described earlier about patient retention to get us to 310, and then the continued growth outside of the U.S. That's what will get us to the 320.

Got it. Thank you. Very helpful.

Our final question comes from Mari Raycroft with Jefferies. Please go ahead.

Hi, good morning. This is Yawang Fumori. Thanks for taking our questions. Congrats on a good quarter. I guess our first question is on the Q2 revenue growth. You're saying for the rest of the year, the revenue growth is going to be more steady. From last year, we saw there was a bit of confounding factor from the 4th of July holiday ordering that affected the relative growth rate of Q3 and Q4. How should we think about the effect this year?

So Q3 and Q4 will not be as big a jump in revenue as Q2, because Q2 was driven by the patient growth, but also all the factors coming out of the Q1 reauthorization process. So as Anthony described in his comments, we should average about 85.5 for the, a little bit less than that in Q3, a little bit more in Q4 to get to the 320. For the July 4th, yeah, so July 4th was on a Tuesday this year. So there was a day or two of shipments that came into June. And that was part of our expectation this year. We saw that happen last year. And so we built that into our plan. And, you know, just as a reminder for everyone, in the U.S. we have a sole source specialty pharmacy. So, you know, this is all based on individual patient demand. And there are a lot of those patients going away for the 4th of July holiday. And so around times like that you will see a little bit of a pull forward, but it's usually just a day or two of shipments.

I see. Maybe just a quick one on C1 normal patients we saw. Some data on Oradeo successfully managing C1 normal patients early this year and IACHI. I'm just wondering if you're sharing any insights into how you're seeing in real world how patients with C1 normal profile, like how many of them are on the therapy, if you see anything about retention rate and etc.? ?

Yeah, we haven't shared the number other than what you saw in that IACI poster, you know, in terms of the proportion of our business. But we do get C1 normal patients. I think, you know, all the prophylaxis products are seeing C1 normal patients. These are patients who have really struggled for a number of years. It's been, you know, their diagnosis isn't as clear cut as type 1 and type 2. And so they've looked for therapies that work. And what we're seeing for a lot of them is that Orladeo is really helping them. And so we're seeing consistent reduction in attack rates, in patient-reported attack rates. And then from a retention perspective, we're seeing just about as good retention with C1 normal patients as we are with type 1 and type 2 patients. And so You can expect more data from us on this in the future, but right now what we're seeing is we're very pleased and just glad that we can help these patients.

Got it. Thanks so much. Congrats again.

Thank you. This concludes our question and answer session, and with that, the conference is now concluded. Thank you for attending today's presentations.