BioCryst Pharmaceuticals, Inc.

Hello and welcome to the Biochrist second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Nick Wilder.

Good morning and welcome to Biochrist's second quarter 2026 corporate update and financial results conference call. Participating with me today are President and CEO Charlie 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 two of the presentation. In addition, today's conference call includes non-GAAP financial measures. For our reconciliation of these measures against the most directly comparable GAAP financial measure, please refer to the earnings press release available on our investor relations website. I'll now turn the call over to Charlie.

Thanks, Nick. During the second quarter, we continued to execute effectively on the commercial and development fronts. We completed the integration of Astrea Therapeutics, and we further increased our cash generation through growing revenue and discipline spending. That increase in cash flow, bolstered by our strategic decision to wind down internal drug discovery, will enable us to build a balanced pipeline of rare disease assets through external innovation, as Sandeep and Babar will describe. Sandeep will also provide more color on the Venebar, where we completed enrollment of the largest blinded HE trial ever and did it ahead of schedule. Our proof of concept trial for BCX17725 and Netherton syndrome is also enrolling well, and we look forward to having data by the end of the year. This week, we also have exciting news for HEE families as Orlodeo oral pellets started shipping to kids. Despite the manufacturing delay, we have already received 47 prescriptions for Orlodeo pellets through July 31st, which is well ahead of the total we expected for all of 2026. Prior authorizations are complete for about half of these patients, and so far, the approval rate has been strong. We have a lot to learn about ongoing prescription rates, rates of paid therapy, and real-world outcomes for kids taking Orlodeo, but we are thrilled to be delivering this much-needed therapy. Our market research in Q2 showed that preference for and satisfaction with Orlodeo were up for both patients and physicians compared to one year prior. This played out in market demand as new prescriptions for Orodeo capsules in Q2 were consistent with our history and expectations. We also activated new prescribers at a rate in line with historical trends. On the payer side, the heavy part of reauthorization season is now behind us, and we continue to make incremental improvements to the pay rate, which ended the quarter at 84% compared to 83% one year ago. Finally, we are pleased to partner with CareMed as our new sole source pharmacy for Orlodeo shipments to patients. The sole source model has been a cornerstone of our strategy since launch, and because our HEA portfolio and the number of patients that we serve is growing, we chose CareMed for their ability to scale operations with our growth. All Orlodeo pellets prescriptions for kids are shipping from CareMed, and the 12 and up population will transition over the course of this month. We look forward to serving these patients together. I'll turn the call over to Sandeep to describe our pipeline developments.

Thank you, Charlie. I'm pleased to share that in June we completed enrollment of our pivotal study, Alpha Orbit for Nevenibat, our investigational long-acting injectable plasma calcarein inhibitor for HAE prophylaxis. We are excited about the potential for this product to transform the injectable segment of the market with its differentiated profile. We expect to announce the top line data for this program in the third quarter of 2027. Because Navanibhar's extended dosing regimen includes every six months dosing, We will keep the study blinded to reach one year of safety and efficacy data as agreed by the FDA, putting us in a unique position to evaluate the efficacy at six and 12 months. I'd like to also address our June decision to discontinue internal discovery programs and close our research unit in Birmingham. Since I've joined Biochrist, we have completed a comprehensive review of our programs Capabilities and strategic options to ensure your position for future success. After a careful consideration, our team concluded that expanding our access to external innovation is the best way to allocate resources and accelerate the development of a stronger pipeline. This decision has no impact on our clinical programs, including BCX 17725, which remains on track for early clinical data in patients from Part 4 of our Phase 1b study by the end of this year. We remain excited about the potential to bring forward a treatment for patients with Netherton syndrome, a rare, severe skin condition with no approved therapies. We will continue to be active in our search for external assets. The decision to end internal research broadens our scope to build a balanced pipeline of differentiated assets across clinical stages in areas of high NMEC need where we can leverage our scientific, clinical, and commercial strengths. I will now transition to my colleague, Babar. Thanks, Sandeep.

Our second fiscal quarter reflected continued momentum across the business, steady growth in Olydeo, It was also another quarter that reflected our financial strength with strong operating profitability and a cash position that leaves our balance sheet in excellent shape to execute on our go forward strategy. In my remarks today, I will be referring to some non-GAAP figures which are adjusted for revenues and expenses related to our former European holiday of business, stock-based comp, and expenses related to the acquisition of Astria. You can find additional details for adjustments and reconciliations in the press release. We believe the non-GAAP figures provide a better underlying view of our business on a forward-looking basis. With that said, let me turn over to the financial results. Total revenue for the second quarter of 2026 increased 45% year-on-year on a comparable basis. That is excluding the European divestiture. I would draw your attention to Oladeo revenue of $158.2 million in the quarter, which grew 10% year-on-year on that same comparable basis. New patient demand remains strong, and as we build on our understanding of the feed market dynamics with real-world outcomes, we feel confident that it will continue to augment our growth. Market research results continue to deliver the same consistency of findings regarding the value of Oladeo, and we naturally see that play out in our day-to-day commercial execution. Still adding new prescribers, we see consistent long-term patient retention to past trends, and now with the reauthorization season largely complete, we achieved a slight increase in our pay rate over last year, but which is important and impressive at the same time because you may recall we had already made a substantial improvement on that metric last year. And that is a true reflection of the benefit of Oladeo for HAE patients. Our total revenue for the quarter also includes 55.7 million recognized in the quarter from the upfront payment of our Navanibhat European License Agreement with Neopharm at Gentilly. I'm also very pleased to share that we are seeing stable operating costs across our business. As you can see from our press release, our non-GAAP G&A and sales and marketing expense categories for both the three-month and the six-month period remain relatively flat compared to prior periods. The increase in R&D is driven by ongoing phase three activities for Navanibhat, as you would expect. As a result of these trends, we posted a strong non-GAAP operating profit of $113.2 million for the quarter. Importantly, we have taken deliberate steps to further sharpen our cost structure going forward. As we stated in our June news release, we are shifting our R&D strategy towards an external innovation model, discontinuing our internal discovery programs along with the announced closure of our Birmingham facility by the end of this year. The result is a leaner, more focused operating model that is expected to generate meaningful cost savings as legacy R&D costs continue to come down. This enables us already to improve on our non-GAAP operating cost guidance range for the remainder of the year which we brought down from the earlier range of $450 to $470 million to $420 to $440 million. The financial discipline continues to positively impact our balance sheet. We ended the quarter with just over $350 million in cash, cash equivalents, and investments. And importantly, we generated positive cash flow in the quarter, even setting aside the upfront proceeds from the license agreement. Simply put, our balance sheet has never been in a stronger position. On that front, let me address from a financial standpoint our strategy going forward. We have a business that continues to generate strong profitability and cash flow growth. We have two very important catalysts, one of which adds to our growth profile in the near term. So from a BD perspective, we don't feel any need to unnecessarily stress our balance sheet. As Sandeep alluded earlier, with the shift to external innovation, it allows us to build a more balanced pipeline of clinical assets across all stages. These could be early to mid-stage clinical programs where we will have much more transaction structure flexibility. But ultimately, the objective for us is not about the quantity, but rather the quality of the clinical programs that add to our overall growth profile. We are in a very unique position relative to other companies of our size in that we can finance BD and R&D, deliver profitable growth with excess cash flow, remain flexible to consider de-levering the balance sheet and our buybacks. Moving on to financial guidance. Given closing of the Navanabad EU license, we are raising our total revenue guidance to the range of 690 to 715 million. Despite the delay in the pediatric launch, we feel long-term Oladeo trends are intact and hence maintaining our full year 2026 Oladeo revenue guidance of 625 to 645 million. On non-GAAP operating costs, we are maintaining the range at 420 to 440 million that we announced on June 29th. Over the last 12 months, our business has gone through a number of critical transactions. Sale of Europe, followed by the Astri acquisition, a CEO transition, and now the recent Birmingham decision. And while the new Biochrist, I would say, is still in an evolutionary phase, one thing that has remained constant is a strong operating performance record throughout. For that, I'm deeply grateful to our team for their unwavering focus on what matters most, advancing Oladeo, and a pipeline to deliver critical, life-changing medicines to patients. With that, operator, we are now ready for questions.

Certainly. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment, please. Your first question comes from the line of Laura Chico with Wedbush.

Hey, good morning. Thanks very much for taking the questions. Just two from me. One, it looks like a very solid Orlodeo performance this quarter. I know one of your competitors had indicated their prophylactic product was seeing switches from a range of patients. Just curious, maybe Charlie or anybody else want to comment? Any anecdotal evidence with respect to Orlodeo persistence in the period, I guess? Are you seeing more pressure from competitors? And then just one on the Netherton program. I think you mentioned enrollment is proceeding. Are you approaching the completement of recruitment? And just kind of curious if you could elaborate on any challenges or learnings that you've made so far. Thanks very much.

Great. Thanks, Laura. I'll take the first question. Sandeep can address the second one on Netherton. Yeah, obviously, we have new competitors out there, new injectables. And what we're seeing is what we expected from all of our market research is that The injectables are primarily affecting existing injectables, particularly Taxairo. The overall retention for Orlodeo is the same pattern as Babar mentioned in his statement. So, of course, we lose some patients. And what now happens is we tend to lose them to the newer products as opposed to the older products, which is exactly what we expected. And, you know, our overall view on Orlodeo growth, we're very positive about. Sandeep, do you want to address the medicines?

Yeah, thank you for the question. So we are on track for completing our POC data that will be coming end of this year. And what are we seeing? As you've seen in our healthy volunteer data, the safety has been well tolerated and the drug distribution that has been part of the epidemics where all the action is. So at this point, That is the only thing we can comment on. We are still waiting for more data to come in terms of the holistic understanding of the PKPD and the clinical efficacy endpoints.

And Laura, just as far as enrollment in the trial, yeah, it's been going strong and we're confident that we'll have that up to 12 patients at the end of the year and that'll inform next steps for the program.

Yeah. Perfect. Thanks, guys.

Thank you. Our next question comes from the line of Gavin Clark Gardner with Evercore ISI.

Hey, guys. Thanks for taking the question. Just following up on the Netherton side, what are your expectations for how a placebo arm could potentially perform? We have some of the Spivico data showing a bit of an improvement from baseline. We have the Daiichi data. which showed maybe a little bit of a decline on placebo. So I guess I'm just curious how you're piecing together this and contextualizing what a good result is on the efficacy side. Thank you.

Yeah, for us, the way we are thinking about BCX17725, it has the potential to be the first systemically administered and a targeted drug for Nettleton syndrome. And the rest of the modalities and other things that have been in use, they are not impacting the implicated target that is exactly needed for the Netherton syndrome. So this is the KLK5, which is what we are targeting. So for us, when we look at these patients, they have no approved therapies. So any relief for improving signs and symptoms for Nethertons would be a big advance based on our discussions with the patients and the KOLs. So that's what we keep on learning. and we will have a better understanding of the totality of the data that will come at the end of the year. And so it's, you know, obviously the placebo is, there will be some placebo response, but then there is the disease itself has its own waxing and waning. It's a very variable disease, you know, in general.

Sounds good. Thank you.

Thank you. and our next question comes from the line of Stacey Koo with TD Cowan.

Hey there. Thanks so much for taking our questions.

We have a couple.

So first, as we think about Orlodeo, maybe just can you talk through the clinician additions this quarter versus historical averages? What kind of halo effect might you expect with the pediatric launch? I understand your comments on the injectable kind of Share with new patients to just help understand kind of how Oradeo is continuing to progress in a steady fashion. So that's one. And then two, maybe talk about the new specialty pharmacy setup. Is there any expectation setting when it comes to the transition? Should it be really smooth? Just help us think about the cadence of the U.S. launch for Oradeo, maybe how the second half might look relative to the first two quarters. So that's the second question. And then just a very quick follow-up on other TINs. Given that you are in part four, any early comments you're willing to share on part three? Thanks so much.

All right. Thanks, Stacey. On the clinician additions, you might recall from the past, we talked about approximately 60 new physicians per month prescribing Orlanea. We were a little bit above that. Orlodeo continues to gain in the market. From the halo of pediatrics, obviously it's still early, but of those 47 prescriptions, a number of them were actually prescribed by physicians who had not yet prescribed Orlodeo. So that's a good early sign. Like I said, there's a lot to learn about peds now that we have product in the market, but we're off to a really good start. On the new SP transition to CareMed, the biggest decision was, as I mentioned, the ability to scale with us as we grow. But in the process, we also did look at experience bringing in active programs, and CareMed has a lot of experience doing that. And we've kind of been impressed with their track record. Anytime you do a switch like this, there can be bumps. And this whole switch is just starting this month. We don't expect it to affect Orlaneo long term, but we'll have to just kind of see in the quarter. We think long term this is going to be great for patients. And, you know, our guidance, as Babar said, is still the same, 625 to 645 for the year. And, you know, I don't even need to pass this over to Sandeep on the sharing anything on part three. No, it's too few patients, too short a time. We're really pleased with how Part 4 is enrolling, and we look forward to having data at the end of the year.

Thank you so much.

Thank you. Our next question comes from the line of Timur Ivankov with Kantor.

Thank you. This is Timur Ivankov on for Steve Kausk. So our question is for Arladeo. We're hoping you could provide some color on the volume growth in the quarter because it sounds like you grew revenues 10% year-over-year, but there was also a 9% price increase, and you mentioned increased paid rate. So what does this imply about volume growth year-over-year in the quarter? Thank you. Yeah, sure, Tamar.

It's basically half and half. So you might recall that on the 9% price increase, we previously said we net about 4.5% of that, and then You know, obviously we improved the paid rate a bit, so the overall was about half volume, half kind of price and reimbursement.

Great, thank you.

And our next question comes from the line of Jess Fye with JP Morgan.

Hi, this is Sylvia Unn for Jess Fye. Two questions from us. Can you elaborate on your business development priorities? Does this look more like bolt-on acquisitions to the clinical pipeline or partnerships? And what kind of profile businesses does this look like? And the second question I have is, can you walk through the OPEX outlook for 2027 and beyond in the scenario where Netherton's advances and in the scenario where it doesn't, just to help us understand the flex factors there? Thank you.

Yeah. Let's say that, you know, from a BD perspective, the objective is to build a really high value pipeline, validated biology proof of principle. As I mentioned, that naturally, we are not going to stress our balance sheet. So we're not looking at large company acquisitions that would put stress. We are very laser focused on delivering on our catalyst. So it could be a clinical mid-stage assets and with an emphasis on clinical assets. You know, that's where we think we can do a real impact. So that's from a BD perspective. and many others throughout the world. And like I said, we are cash generating, self-sufficient, so we don't necessarily looking at the large capital raises to fund our BD or R&D operations. From an OpEx standpoint, I think the outlook is really strong. We haven't really given 2027 guidance, but as you may recall that when we lowered our guidance, that was at the middle of the year that we were making this decision. And when we are ready to provide that guidance, we are anticipating that the cost will continue to go down We will be past the Birmingham facility closure. We will be past closing our internal programs. So looking ahead, it's basically Nethetan and Navanibhat expenses. And as you can imagine, that Nethetan expenses, Navanibhat expenses will be coming down as well as that program reaches its completion. So going forward, the operating expense guidance absent any new BD deals will be really strong. Having said that, it is our objective that even as we bring BD assets in, Biocrist is committed to delivering profitable growth. So that is a key imperative for us to remain profitable and cash flow pass positive.

Thank you. And our next question comes from the line of Serge Belanger with BNUM.

Hi, good morning. Thanks for taking my questions. First one regarding the pediatric launch. Charlie, I think you mentioned that the initial numbers were tracking ahead of your expectations. Just curious if that changes your outlook for that opportunity and whether we should expect the paid RX rates, which I think resides around 80% right now, to be similar on the pediatric side. And then I guess second question, just looking at slide six where you highlight 1,600 patients are currently on therapy. and 3,500 other ones have tried the product since launch. So I assume there's another 3,000 to 4,000 patients that have yet to try the Orladeo at this point. Are you able to capture these other patients via the current base of prescribers, or you'll need to expand beyond the 1,500 unique prescribers you currently have?

Yeah, thanks. Thanks, Serge. Yeah, as far as the PEDs, like I said, we're encouraged by the early demand since we just have product going out to patients this week. And obviously that should probably make prescribers more comfortable too. We have to kind of see what the ongoing trend is. And so it's a little too early to call, but certainly the early signals are very positive. As far as the paid rate, We expect it to at least be in the range of what it's been for capsules. The payer mix will be a little bit different, obviously, because we're not going to have Medicare. So it's going to really be a split between commercial and Medicaid. But the early signs there are good as well. And the pediatric pellets slot right into our contracts that we already have. So it's not like a new lift to get these things on formulary. As far as the The ongoing opportunity, yeah, I think the fact that demand has continued to be as consistent and strong as it's been over the last couple of years, plus we're adding new prescribers, just shows that there's still plenty of opportunity out there. And we see that in our market research as well. We also see that new prescriptions are coming very strongly from existing prescribers, as well as obviously these new prescribers that are opening up. So the pattern on that really hasn't changed. And pediatrics can only further helped that.

Thank you. And our next question comes from the line of Brian Abrams with RBC Capital Markets.

Hey, good morning. Thanks for taking my questions. Two for me. Maybe first on Novena Bart, just with the enrollment completion and upsizing in that study, just wondering if I guess the upsizing was based on just like higher than expected interest or on any kind of observations on dropouts. The types of patients you're seeing there and sort of any implications for powering and should we assume this is almost entirely adults with just a few adolescents. And then secondly, it seems like you're, you know, with Orlogeo, you're in a nice steady state with regards to patient retention. Just wondering if there may be any ways you can and many more. And we will further improve on that just ahead of potential competitor launch. Anything that you might be, that you might see in upcoming competitor oral prophy results that could adjust your strategy there just in anticipation of potential additional competitive entrant. Thank you.

Sure, Brian. Let's do the and I'll take the first part. You take the second part, Cindy. Just on the upsizing note, it had nothing to do with anything about powering. about patient and investigator interest. And as we mentioned, it was the largest blinded trial ever in HAE, yet it enrolled just as quickly as other recent trials that were smaller. And so I think it's a reflection of the team, excuse me, as well as the profile of the product. Do you want to just talk about the overall powering?

Yeah, so the overall powering, we are already overpowered for the trial, so we don't have any concerns. In this case, it was just a and many others. And then as far as patient retention, I think

One of the things we always look at is just our operations and how we're performing. And we think that there might be a few things there that we can further improve, but we're pleased with the overall rate of retention. And it really comes down to what we said before, which is patients either do quite well on Orladeo and then they're very sticky. and they move on. And so, you know, that's what our market research shows. That's what our real world evidence shows. And we expect that to continue. One thing we will be looking for is in the pediatric indication, what is the retention there? And that's going to take us some quarters to really see that in the real world. But in the clinical trial in Apex P, we saw that long-term patient retention at one and two years was above what we saw in our adult trial in APEX2. So we'll see if that plays out in the real world.

That's really helpful. Thanks so much.

Thank you. And our next question comes from the line of Maury Raycroft with Jefferies.

Hi, good morning. Congrats on the quarter and thanks for taking my questions. For the new patient prescription momentum being maintained at second quarter, Is that only driven by the new pediatric patients or prescriptions, or can you provide more context on how we can quantify this and understand contribution from new adult patients versus pediatric patients?

Sure. Yeah, the 12 and up population for early day capsules, demand was very consistent with what we've seen over the last couple of years. So that was what we expected, but it was also great to see that continued consistent strong demand. And then the pediatrics, Off to a great start. That's just upside on top, and we'll see how that progresses over the next few quarters.

Got it. Okay. And then just clarifying with the paid rate at 84%, does that only include the adult population? And wondering if you can comment on just how you expect the paid rate to continue increasing for third quarter and fourth quarter.

Yeah, that does only include the adult population because we didn't have the The Peds, the pellets out there yet in Q2. And just a reminder, the paid rate also includes patients who are completely uninsured. So that's about 4% out of that 16% that are getting free product. So we feel like we're making great progress and continuing to chip away. Our long-term goal was 85%, but I always say that if we get to 85%, our goal will then go up and we feel good about it. Typically, and I've said this before, in the second half of the year, the paid rate tends to drop off a little bit because the patient mix is driven more by new patients coming in who tend not to get to that 84% quite as quickly. For some of them, it takes longer. And so the typical pattern is a percentage or two is lost over the second half of the year, and then we gain it back in the reauthorization season next year. So I think end of Q2 is a great point to measure progress. And that's why we pointed it out this year where we picked up a percent versus last year. Next year, I would expect us to be at or above where we were at the end of Q2 this year. Got it. That's helpful. Thanks for taking my questions.

Thank you. Our next question comes from the line of John Wollobin with Citizens Bank.

Hey, thanks for taking the question. Just talking about the pediatric opportunity, you've talked a little bit before about 500 diagnosed patients and with 10% already seeking prescriptions. Can you talk a little bit about that early dynamic of those where families coming in and asking about Orla Day or you guys getting out there in the community? How do you think about the ramp and then also the diagnosed population as you get out there and talk about it more?

Yeah, again, I mean, Jon, it's really exciting what we've seen. You pointed it out. It's close to 10% of that 500 number. What we are seeing in our market research is that physicians, A, are very enthusiastic about prescribing Orlodeo pellets to kids, and B, the availability of an oral prophy makes them think about prescribing to more of their pediatric population in general. And so the early signs are that we could not only get more of the existing prophy patients onto oral prophy, but also grow the market, expand the market, because there should be more like 1,200 kids diagnosed in this age population. And so we're going to be watching for signs that that 500 grows. Early signals are positive, but we're going to need another many quarters to really see how this plays out.

Do you expect to continue giving us pediatric prescription data moving forward?

No, I don't think we'll give you the exact number going forward. We'll give you the overall color on how is demand in general, and we'll probably say how's the demands, you know, directionally going in pediatrics. But we just wanted to give, and you hit the point, it's close to 10% of that 500 number, and so we thought it was significant to talk about it at this point, but we probably won't give the numerical number going forward.

Got it. Thanks, Charlie.

Thank you. I'm showing no further questions. Ladies and gentlemen, we'd like to thank you for participating. This does conclude today's program.