BioCryst Pharmaceuticals Inc 2026 Q2 Earnings Call

Good morning, welcome to BioCryst'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 a 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 Astria Therapeutics, we further increased our cash generations through growing revenue and disciplined 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 navenibart, where we completed enrollment of the largest blinded HAE trial ever and did it ahead of schedule. Our proof of concept trial for BCX17725 in Netherton syndrome is also enrolling well, we look forward to having data by the end of the year. This week, we also have exciting news for HAE families as ORLADEYO oral pellets started shipping to kids.

Despite the manufacturing delay, we have already received 47 prescriptions for ORLADEYO 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. So far, the approval rate has been strong. We have a lot to learn about ongoing prescription rates of paid therapy, and real-world outcomes for kids taking ORLADEYO. We are thrilled to be delivering this much-needed therapy. Our market research in Q2 showed that preference for and satisfaction with ORLADEYO were up for both patients and physicians compared to one year prior. This played out in market demand as new prescriptions for ORLADEYO 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. We continue to make incremental improvements to the paid 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 ORLADEYO shipments to patients. The sole source model has been a cornerstone of our strategy since launch. Because our HAE portfolio and the number of patients that we serve is growing, we chose CareMed for their ability to scale operations with our growth. All ORLADEYO 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 navenibart, our investigational long-acting injectable plasma kallikrein 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 navenibart'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 BioCryst, we have completed a comprehensive review of our programs, capabilities, and strategic options to ensure we are positioned 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 BCX17725, which remains on track for early clinical data in patients from part 4 of our Phase I-B 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 unmet 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 ORLADEYO, substantial progress across our clinical pipeline, as you heard, and very importantly, a key step forward in resolving the manufacturing issue to get our pediatric launch underway. 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 ORLADEYO 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 ORLADEYO 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 ped 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 ORLADEYO, 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.

Now with the reauthorization season largely complete, we achieved a slight increase in our paid rate over last year, 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. That is a true reflection of the benefit of ORLADEYO for HAE patients. Our total revenue for the quarter also includes $55.7 million recognized in the quarter from the upfront payment of our navenibart European license agreement with Neopharmed Gentili. 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 remained relatively flat compared to prior periods.

The increase in R&D is driven by ongoing phase III activities for navenibart, 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 enabled 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 $454 million-$470 million to $420 million-$440 million. The financial discipline continues to positively impact our balance sheet. We ended the quarter with just over $350 million in cash equivalents, and investments. 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.