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Jon Stonehouse – Chief Executive Officer


Matt Lowe - Oppenheimer

BioCryst Pharmaceuticals, Inc. (BCRX) Oppenheimer 24th Annual Healthcare Conference December 11, 2013 4:30 PM ET

Matt Lowe - Oppenheimer

We're going to keep things going here. Our next company to present is BioCryst Pharmaceuticals. Presenting on behalf of the company is going to be Jon Stonehouse. Jon is the President and CEO of the company. Jon?

Jon Stonehouse

Thank you, Matt. Thank you, Oppenheimer, for your invitation to your conference. I'm going to be making some forward-looking statements so statements have risks. Our risk factors can be found on our most recent filings on our website.

So, at the beginning of last year, we laid out a plan focused around three core assets. The first was to be a leader in the prophylactic treatment of hereditary angioedema with the first ever oral kallikrein inhibitors and we're fortunate to have BCX4161 that's entering the Phase II trial and a second generation program as well that I'll speak more about.

Our goal is to dominate the space; ultimately with our program what we're hoping to have is the ability with one tablet once a day to wipe out attacks. And so, it's a lofty goal but we think with a validated target and a small molecule, we have a very good shot at achieving that goal.

In addition to our HAE program, we also have two assets that are antivirals that I think the best way to describe to investors the value is non-dilutive financing, and let me say a little bit more about that.

With Peramivir, it's an IV neuraminidase similar to Tamiflu and Relenza, but will be used in very special cases, where oral and inhaled would not be appropriate and IV would be a better choice. And we're about to file an NDA. And so any dollar that comes from that program, whether it's seasonal sales or stockpiling will be a dollar that's not necessary to come from an investor to fund the HAE trial. So an unusual way of funding programs but one that we find to be a real upside for investors.

The second is BCX4430, and this is a broad spectrum antiviral. We have some very impressive efficacy data that I'll show you in a minute and we hope to share more with you in the future on some really nasty viruses and hemorrhagic fever. But the approach and the strategy and ultimately the value with this asset is an animal rule approach to approval in filoviruses, which is a faster path because you don't have to do Phase II and III human efficacy studies and ultimately get a stockpile order which again could fund commercialization effort for our HAE program. So, and again the dollar coming from stockpiling is one less that we need from shareholders to fund that effort.

So now almost a year into executing this plan I think things look a lot brighter for BioCryst and I'll share with you where we are and where we plan to go with these programs.

So, let's start with HAE. So, suffice it to say these patients have a very challenging life. In the last five years, there have been some really big steps forward in the treatment and prevention of attacks but there's plenty of room left to make improvements in this space.

And so what happens in an HAE attack is patient has a genetic deficiency, which causes swelling. And this swelling can be, at a minimum, disfiguring if it's around the face or the hands. It can be unbearably painful if it's around the abdomen, where I’ve heard stories of patients that actually passed out, the pain is so severe. And it can be life threatening if it's around the airway and it’s a laryngeal attack.

And so right now the treatments for this disease, at least the prevention, is a twice weekly IV infusion. And that's a big improvement in what was offered to patients before.

But what I said earlier is that we're working on an oral kallikrein inhibitor and we think this could be a game-changer for patients and ultimately create meaningful value for shareholders.

The peak sales for Cinryze are projected at $700 million. And you're all probably aware that Shire recently offered $4.2 billion for the purchase of ViroPharma, so this is a highly valuable and lucrative space to be working in.

So, our lead program is BCX4161. And as I said before we're entering Phase IIa but I want to share with you data both before we got into the clinic in our Phase I program and then also our Phase I data ultimately leading up to why we have a high, very high degree of confidence that we'll be successful in demonstrating an effect in reducing attacks in high-attack rate HAE patients.

So, this slide is a ex-vivo study looking at plasma of HAE patients taken in between attacks. And the blue line on this chart – Slide 5 – is varying concentrations of BCX4161 in an assay measuring kallikrein inhibition. And what you can see with increasing concentrations of 4161 you get greater kallikrein inhibition.

The line to the right in the red is C1 inhibitor. And this is research-grade C1 same purification specs and molecular weight of Cinryze and so we wanted to get a sense of potency differences. And so again we use varying concentrations of C1 and looked at the kallikrein inhibition and that's the curve, the red curve, on the right on Slide 5.

So, the potency difference is roughly a 15-fold difference but it's a conservative estimate because the line on the right in red is not only the C1 that we added but in HAE patient plasma they have one good allele, which produces some endogenous C1 and we can't separate that out. So, we believe this is a conservative estimate on potency difference.

Then in addition we took the package insert for Cinryze and made a calculation on the Cmin at either every three days dosing or every four days dosing and we extrapolated that over to what we thought the concentrations of 4161 would be and that's the 50 to 80 nanoMolar converted into nanograms per mL. That's 25 to 40 nanograms per mL.

So, this was the target that we said on a conservative basis, would be what we were shooting for in our Phase I study to have a shot at demonstrating in effect on the target enzyme and ultimately having a greater chance at showing a clinical benefit in HAE patients.

So, starting in March, late March, of this year, we initiated a Phase I study in the UK, single ascending dose and a multiple ascending dose outlined in Slide 6. And ultimately we studied 87 healthy volunteers in this study in a multiple ascending dose phase of this – we looked at seven days of dosing, giving the drug every eight hours.

And Slide 7 is basically a summary of the multiple ascending dose PK. And so a few things to point out on this slide.

First, you see a very –at time zero, so again this is day seven after six days of dosing times zero before the first dose is given on day seven. And you can see there's some slight drug accumulation of about 30%. We get the steady state around two or three days and you could see a very nice dose dependent curves between, you know, 100 all the way up to 800, starts to flatten out at 800.

And then when you apply the target range that I had mentioned from the assay that we did in HAE plasma, you see that with doses of either 400 or 800, we stay above the target range for either all or most of the interval. So, again, I said that that was a conservative target because of not being able to separate out endogenous and exogenous C1 and we think that this drug exposure gives us a great shot at demonstrating clinical benefit in our Phase II trial.

At our last quarterly earnings call, our Chief Medical Officer, Bill Sheridan, also showed some additional information on the Phase I study.

And so on Slide 8 you see on the left the pharmacodynamic data from the Phase I study. Now, it's important to remember in the Phase I these are healthy volunteers with normal C1 levels that produce normal kallikrein-inhibitory activity so you have to take a measurement before you actually get drugged so that you can zero out that effect when you're measuring the kallikrein inhibitory effect at day seven.

And so what you see in the various bars is times zero at day seven all the way up Tmax and then the Cmin for each of the doses in the [inaudible] – dose ranging. And then you can see again a nice dose ranging effect on the pharmacodynamic marker or the kallikrein inhibition assay.

On the chart on the right, we did an Emax model looking at the relationship between the pharmacokinetics and the pharmacodynamics. And what we found is a very, very tight correlation our value of 0.93. And what's also important to note is the note at the bottom of that graph which says, "In vivo PK divided by four.” And the reason we put that in it we have to dilute the samples fourfold – the plasma samples fourfold.

So, it's likely that again we're underestimating the pharmacodynamic effect. Now, it's not fourfold because you can't get above 100% inhibition but it's just one more point around the fact that we feel fairly confident – very confident – that we're going to see an effect in the clinical trial Phase II.

So, what does that Phase II trial look like on Slide 9? It's a IIa study. And so let's start back and say, what is the goal of this study?

It's a basically a four-week treatment study to determine what kind of effect we have on high attack rate patients. So, it's a proof of concept, giving the drug its best shot so that we have some understanding of treatment effect that when we go into Phase IIb we know what kind of dosing schedule and dose ranging we need to do in a Phase IIb study.

So, the way the study is designed is it's very similar to the [lab] [ph] pivotal study for Cinryze, which is 14-week screening window and then patients will either be randomized on BCX4161 or placebo beyond either one of those for four weeks then there's a wash-out period and then they'll switch to whatever they weren't on and be on that for another four weeks and then there's a seven-day follow up.

So it's roughly a three-month period for patients when they start screening to when they're finished. We're targeting up to 25 patients and we initiate with an attack rate of one attack rate or more per week documented in the medical record. And we initiated dosing of the first patient in early November and we expect the result from this trial sometime in the first half of next year. So this is a really important trial for the program and an incredibly important program for the company.

We're also, as I said before, working on a second gen program.

BCX4161 based on the data that I just presented to you we think we've got a very good chance at being very effective against and preventing HAE attacks. And because of the data of that we've seen with 4161 in our second gen program we said, well, there's got to be a really big improvement to invest in this molecule.

And so what we've set for the team and for ourselves in terms of a profile is one tablet once a day, wipe out attacks.

So, a question I would ask you is if we're able to achieve that goal, what HAE patient wouldn't be on that drug?

It's something that we think is achievable because if you can get to normal kallikrein inhibitory activity similar to what’s associated with normal C1 levels that those of us who don't have HAE have, why couldn’t you wipe out attacks with one pill once a day?

So, the profile that we're looking for is a PK profile that's conducive to that. So, it's got to have much better oral bio availability than 4161 and we, with the leads that we've identified thus far we’ve got in the range of 20% to 60% oral bio availability, which is 4x to 12x higher than that of 4161.

We want to retain the potency, and so we – BCX4161 has a Ki of 0.26 nM. We want to be in the range of between 0.5 and 0.10 and I can tell you that of the molecules we're looking at we're in that range or even better.

And then lastly, we want to have high selectivity. And so, as many of you – the investors know there's a tissue factor – Factor VIIa potency with 4161. The separation between effect on Kallikrein and extending bleeding time in humans is almost a thousand fold so there's plenty of room for therapeutic effect without worrying about bleeding. And we've even seen in the Phase I study no effect on any of the coagulation assays over seven days of treatment.

But with a more potent and more bio available drug, we'd like to just not worry about that at all. And so our team of discovery chemists have come up with molecules that do not have an effect on tissue factor – factor VIIa.

So, then the last piece would be that we want a PK profile that's conducive with once daily dosing so that's the remaining piece to the puzzle that we're working on. We're encouraged by the early signs that we see and we expect that we would be finished with this identifying at least one lead maybe more by the end of this year, and so you should hear an announcement either late this year or early part of next year, so very exciting.

So, roughly a two-year distance between the 4161 program and our second gen program and we will keep you updated on the progress we make.

So, that's it for HAE and our program around HAE. Then, as I mentioned in my comments at the beginning of the presentation we also have some non dilutive financing assets that we think are unique and could be very valuable in funding our HAE program.

And so as I had mentioned we're about to file Peramivir, the NDA for Peramivir very soon, we said by the end of the year, and we're on track so we've got a few weeks left and we're on target to do that.

I think the main takeaways you should take from this program are that there is a big need for an IV neuramindase. The country doesn't need or the world doesn’t need another neuramindase inhibitor that makes you feel better a day early but there are a number of patients that aren't able to either take an oral or inhaled or an IV is better in terms of compliance and the like, and so we believe that there is a big unmet need, a niche population for treatment. And because of the pricing that we did in 2009 in the pandemic, this could be a valuable asset for the company, either through stockpiling with the government or through seasonal sales. So, we expect a 10-month review. That's what's we're planning for and so we're hopeful that this time next year we have an approved product at BioCryst and are benefitting from the value generated from this compound.

And then lastly I had mentioned that we have a broad spectrum antiviral. This is some of the most interesting efficacy data that we have in the company and I say that with one caveat that we haven't yet completed the Phase II HAE program yet but at least to this point this is very interesting efficacy data.

So what you see on Slide 12 is data from a study with the NIH and it is in Yellow Fever. Golden hamsters – that's the model to measure the survival benefit of drugs in Yellow Fever. And what I'll draw your eye to are a couple of points. One, it was a placebo-controlled trial and you can see from the red dotted line on Slide 12 that this is pretty lethal virus in this model. You can also see from the olive line with the diamonds and the green line as well that we use Ribavirin as a control. And in particular, we dose Ribavirin for the 10 days post infection, that's what DPI stands for.

And if you look at 4430 at days dose post infection for the 10 days post infection you can see a survival rate of approximately 80%, where with Ribavirin it's below 40% and with placebo, it's a 20% survival rate.

So, we think we've got something very interesting here. We believe it has broad application against a number of hemorrhagic fever viruses. As I mentioned before, we have some interesting filovirus data in Marburg that we hope will get published in the not-too-distant future. It's an attractive enough program where NIAID recently awarded us a $5 million contract with up to $22 million of payments to advance this program all the way through Phase I.

And as I said before because we will take an Animal Rule approach with this asset, we think it's a faster program and ultimately a stockpiling order could lead to really nice non-dilutive financing around the time we would be launching our HAE assets.

So, we're very excited about this; stay tuned on this program. It's early but we believe that it could be a very valuable program for the company.

On Slide 13, just a summary of where we are financially. So we ended the third quarter with $43.4 million and our operating cash utilization guidance remains at between 22 and 26. So what that means in terms of – we haven't given any future guidance for 2014, but basically we have enough cash to get through next year in a little bit into 2015 assuming no additional inflow into the company. So, let me wrap up with things that you should be paying attention to with BioCryst in the coming months.

Obviously, the NDA filing is an important event for the company and will be coming soon. The selection of the second generation molecule or molecules for HAE – for oral kallikrein program – we'll be announcing that relatively soon. The results from the Phase IIa 4161 trial in the first half of next year and then ultimately approval for Peramivir, progress with 4430 program, our broad spectrum antiviral and the like.

And so we think if you look at where we were a year ago and you look at where we are today we're in a much better situation and we think there’s a real opportunity for creating meaningful value and it's very exciting drugs for patients.

So with that, I will take your questions.

Question-and-Answer Session

Matt Lowe - Oppenheimer

We have time for a few questions. If anyone has one.

Unidentified Speaker

And so you talked about your goals for the second generation kallikrein inhibitor. With the first gen that you have in trials now, what are you – do you have any idea from models, what you would hope to see regarding a reduction in attack rate?

Jon Stonehouse

Yes. So I'll put them in categories because since we don't have actual clinical data it's hard to predict that. But I'll put it in buckets.

I think it's in general, we're real optimistic that we're going to see a very good result. If we see a 50% reduction in this four-week treatment, that's similar to what we saw in the pivotal Cinryze [lab] [ph] study. I think that's a fantastic result. Anything better than that and it's a great spot to be in.

I also think – I don't expect this but since it's oral if there's a modest effect in particular, if we have – if we wipe out attacks in some subset of patients, I think that's very attractive, you know. ViroPharma has been able to show that with a thousand - roughly a thousand patients you could generate $400 million in sales.

So, if we have 15% of patients, you know, we either show a very good reduction in attack rate or we wipe out attacks I think that's still a viable program. We're going to shoot from more that that with a second gen. We may get way more than that with the first gen. But I think there's a number of scenarios that are financially attractive.

Unidentified Speaker

And what's the dosing like with the first generation?

Jon Stonehouse

So, for the IIa study, we're looking at 400 milligrams three times a day. I think our view is we're probably overshooting for the reasons that I had mentioned before and so the IIb – once we get the results from this IIa, we'll look at lower doses and possibly less frequent dosing.

Unidentified Speaker

Can you just briefly comment on the structure of BARDA contract? And then what is the Animal Rule?

Jon Stonehouse

Okay. So, the BARDA contract is an advanced development contract so it's basically an R&D contract that started out as a $100 million award. And then over the course of the development, additional money was added to the contract, to where it ultimately got to a $234.5 million, basically R&D contract. And the goal of that program was licensure.

So, we're coming up to the end. It funds us to filing and they released after we went through the pre-NDA meeting with FDA, BARDA went through their evaluation process and then released the remaining $12.8 million we needed to be able to do the work that we needed to do to file, and so we're nearly done.

And then it's responding to the FDA's questions; an advisory committee meeting that we'll likely have some time next year and then ultimately we hope approval. And then we'd hope to go back to BARDA after approval and discuss the procurement contract for stockpiling.

And your second question again?

Unidentified Speaker

What is the Animal Rule?

Jon Stonehouse

The Animal Rule – what is the Animal Rule?

So, for – in particular for viruses that are very nasty and not common like Ebola and Marburg, you can't do a human efficacy study. Just –one, you can't find where to do these and patients are probably already dead by the time you're able to get them into a clinical trial. So these are really lethal virsus.

So, as a result the FDA has come up with a regulatory path referred to as the Animal Rule, which basically you need to – and it's not – you know people think it's really easy; it's not. You need to be able to show efficacy in certain validated animal models – that's number one with these highly virulent viruses.

And then you've got to show a good PK/PD relationship so that you can make an extrapolation of what you see in animals make sense in humans.

And then lastly, you've got to have human safety data to make sure that it's safe. And those are certainly much larger trials. There are healthy volunteer studies but they're much larger than your typical Phase I for example.

But what it eliminates usually is a Phase II and Phase III efficacy trials, which are big, expensive and take a long time.

Matt Lowe - Oppenheimer

More questions?

Unidentified Speaker

Actually I had a couple. Could you maybe expand upon your experience with the PK/PD studies in the Animal Rule? And how difficult was that with…

Jon Stonehouse

With 4430?

Unidentified Speaker


Jon Stonehouse

So, the question was around PK/PD. We haven't shown a lot of that data yet; we're saving that for publication and/or our scientific meeting. But suffice it to say that there's a very good relationship that we think, you know, if we could – if we're able to show efficacy with these nasty viruses in the right animal models, we're pretty confident that we've got at least the initial evidence that there's a nice PK/PD relationship.

Unidentified Speaker

Okay, and then maybe last one on 4161. Could you maybe elaborate on your go-to-market strategy and give us a little bit of insight into the competitive landscape?

Jon Stonehouse

Yes. So, you know, what's great about what ViroPharma did is they really created a playbook for small companies on how to really maximize value in the HAE space, how to help patients navigate some of the challenges with their customer service work that they've done and they've created real value. And so, I'm not sure of the exact pharmaceutical representative count, sales rep count that they have now, but at one point it was around 25 – maybe it's up to 40 now, but it's pretty small commercial organizations and there's not a big universe of physicians to call on. And so it's perfect for a small company to do on your own. So our strategy is to take this all the way to the finish line.

I think ViroPharma has had some challenges with Europe but they've also laid the playbook out there for this disease and something that we can learn from.

So our goal right now is to hang on to the value of these assets because we think they're much more valuable in our hands than licensing them out to somebody else.

Matt Lowe - Oppenheimer

Great. Thanks very much.

Jon Stonehouse

Thank you.

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