Biocryst Pharmaceuticals (BCRX) Q2 2026 earnings call transcript

It is now my pleasure to introduce Nick Wilder. Good morning, and welcome to BIOCRYST's second quarter 2026 Corporate Update and Financial Results conference call. Participating with me today are President and CEO, Charlie Geyer, Chief R&D Officer, Dr. Sandeep Menon, and Chief Financial Officer, Bob Urgeas. 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 Astria 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 Barbara will describe.

Sandeep will also provide more color on the Venobar, where we completed enrollment of the largest blinded HE trial ever and did it ahead of schedule. Our proof-of-concept trial for BCX17725 in 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 HAE 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 Orlodeo 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 with 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 Orodeo 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 will turn the call over to Sandeep to describe our pipeline developments.

Thank you, Charlie. I am pleased to share that in June we completed enrollment of our pivotal study, Alpha Orbit for Navanibat, our investigational long-acting injectable plasma calcarine 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. Thank you very much. Since I've joined BIOCRYST, 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 BCX17725, 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-end need where we can leverage our scientific, clinical, and commercial strengths. I will now transition to my colleague, Babur.

Thanks, Andeeb. Our second fiscal quarter reflected continued momentum across the business, steady growth in Oladeo, 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 in the way. 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 Oledo 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 that 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 older deal 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 commercial execution Still adding new prescribers we see consistent long patient retention to past trends and now with the reauthorization season largely complete we achieved a slight increase in our paid 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 Oledeo for HAE patients Our total revenue for the quarter also includes $55.7 million recognized in the quarter from the upfront payment of our Navinavar European License Agreement with Neopharmet 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 GNA 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 Navanibad 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 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 up-print 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 delevering the balance sheet and or buybacks.

Moving on to financial guidance. Given closing of the Navinibat 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 29.

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 BIOCRYST, 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 older deal and a pipeline to deliver critical, life-changing medicines to patients.

With that, operator, we are now ready for questions.

Great. Thanks, Laura. I'll take the first question. Sandeep can address the second one on Netherton. And 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 TaxIro. The overall retention for Orlodeo is the same pattern, as Bobber 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 early day of growth, we're very positive about. Sintip, do you want to address the other questions?

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 have seen in our healthy volunteer data, the safety has been well tolerated, and the drug distribution that has been part of the epidermis 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.

Like, we have some of the Stavigo 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 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 QOL. 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 a you know obviously the placebo is there will be some placebo response but then there is this the disease itself has its own waxing and waning It a very variable disease in general Sounds good. Thank you.

All right. Thanks, Stacey. On the clinician additions, you might recall from the past, we talked about approximately 60 new physicians per month prescribing Orlodeo. We were a little bit above that. So it's, you know, 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, you know, 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. Any time 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 Corlodeo 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 Barbara 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 3. No, it's too few patients, too short of time. We're really pleased with how Part 4 is enrolling, and we look forward to having data at the end of the year.

Yeah, sure, Tamir. 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.

Yeah. So I would 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, 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 catalysts, so it could be clinical mid-stage assets, and with an emphasis on clinical assets. That's where we think we can do a real impact. So that's from a BD perspective, how we're thinking about the world. And like I said, we are cash generating, self-sufficient, so we don't necessarily look 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 costs will continue to go down because, you know, we will be past the Birmingham facility closure. We will be past, like, closing out internal programs. So looking ahead, it's basically Nethaton and Navinibart expenses. And as you can imagine, that Nethaton 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, BIOCRYST is committed to delivering profitable growth. So that is a key imperative for us to remain profitable and cash flow positive.

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 been for capsules The payer mix will be a little bit different obviously because we not going to have Medicare So it 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 not like a new lift to get these things on formulary As far as the ongoing opportunity yeah I think the fact that demand has continued to be as consistent and strong as it been over the last couple of years plus we adding new prescribers just shows that there 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 help that.

Sure, Brian. Let's do the Novenobart, 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. It was purely 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, 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 function of more interest from the investigators, so that actually is a very, very positive sign for all of us in terms of the uptake of how much value the physicians are adding to this kind of modality. And then as far as patient retention, you know, 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 Orlodeo, and then they're very sticky, or they don't, 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 APEX-2. So we'll see if that plays out in the real world.

Sure. Yeah, the 12 and up population for early-day-old 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.

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 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. And 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, you know, 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.

Yeah, again, I mean, John, 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 Erlodeo 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.

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.

Thanks, Charlie.