Tom Staab - Chief Financial Officer Jon Stonehouse - Chief Executive Officer Dr. Bill Sheridan - Chief Medical Officer Lynne Powell - Chief Commercial Officer.

Jessica Fye - JPMorgan Charles Duncan - Piper Jaffray Liisa Bayko - JMP Securities Maury Raycroft - Jefferies Brian Abrahams - RBC Capital Markets Serge Belanger - Needham & Company Tazeen Ahmad - Bank of America.

Good day, ladies and gentlemen, and welcome to the BioCryst Third Quarter 2017 Earnings Conference Call. At this time, all participant lines are in listen only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Tom Staab, Chief Financial Officer. Sir, you may begin..

Thank you. Good morning and welcome to BioCryst's third quarter 2017 corporate update and financial results conference call. Today's press release and accompanying slides are available on our website. Participating on the call with me today are Jon Stonehouse, Chief Executive Officer; Dr.

Bill Sheridan, Chief Medical Officer and Lynne Powell, Chief Commercial Officer. Following our formal remarks, we will answer your questions.

On slide two, we have provided an agenda for the call, whereby Jon will make some introductory remarks, Bill will discuss our agreed and regulatory pathway to bring BCX7353 to market, Lynne will discuss the significant market opportunity oral HAE therapy and I will discuss the details of our third quarter financial results.

Following our formal remarks, we will answer your questions. Before we begin, I want to direct your attention to slide three, which discusses our use of forward-looking statements and potential risk factors regarding an investment in BioCryst.

As detailed on the slide, today's conference call will contain forward-looking statements, including those 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 could cause our actual results, performance, or achievements to be materially different from any future results or performance expressed or implied 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 you can access on our website. I would now like to turn the call over to Jon..

Thanks, Tom. Good morning, and thanks for joining us today. The opportunity in front of us at BioCryst is significant and we’re determined to take full advantage of this opportunity, by both executing our plan to approval and successfully competing in the market place.

We recently completed our regulatory interactions and have feedback from both the US FDA and European EMA to finalize protocols and get our trials started. Bill will over the design of our single pivotal trial and long-term safety study in a minute. These are the two major efforts on the critical path to approval.

The design of APeX-2 is very similar to APeX-1, APeX-2 is just larger and longer. Replicating this design is important as a result of the APeX-1 results being robust and this gives us confidence the probability of success in Phase 3 is high.

Wrapping up the regulatory update, last week the FDA also granted 7353 Orphan Drug status, so it’s now full speed ahead. We’re focused on execution and getting these trials up and running and driving them to completion. I mentioned earlier the opportunity is significant. Currently, US HAE annual product sales totaled $1.5 billion.

However, when you look at the number of patients treated with prophylactic C1 inhibitor, it’s only about half of the total population. To get these prophylactic patients to switch and to get more patients on prophylactic therapy, they have to have something they really want.

What they say they want consistently in our market research, in public forums, in surveys presented at medical conferences like the one at the allergy college meeting a couple of weeks ago, is they want a normal life. A normal life to them is an effective and convenient prophylactic therapy. Once a day oral BCX7353 fits that profile beautifully.

That concludes my introduction. I will now turn it over to Bill..

Thanks, Jon. Recently we completed very productive regulatory interaction with both FDA and the European authorities. And I’m pleased to share details of the finalized Phase 3 program with you all today.

The regulatory guidance on the Phase 3 program was very useful, and we can now move forward with confidence with the BCX7353 efficacy and safety study is needed for mapping applications.

The key changes to our proposal were to increase the duration of the placebo controlled Phase 3 efficacy study from 16 weeks to 24 weeks, and to evaluate long-term safety with both those levels.

These changes can form to recent regulatory precedent and optimize our opportunity to have both doses labeled with very competitive efficacy and safety results. A quick note on dosing terminology.

To confirm to current convention, we have standardized [inaudible] to the base content rather than the total salt way with the compound, that means the 175 milligram salt dose is described as 150 milligrams and the 125 milligram dose as 110 milligrams. They are the same, there is no change in dose.

The [inaudible] for the APeX-2 Phase 3 trial is shown on slide five. Subjects with at least one attack per month, went into a screening period and will then be randomized in a one-to-one-one ratio to placebo or one of two doses the BCX7353 110 milligrams once a day and 150 milligrams once a day.

Expanding the inclusion of that [inaudible] to subjects with one attach per month, broadens the population to choose from for this trial. The duration of blinded daily dosing is 24 weeks with final analysis for efficacy at that time. The primary endpoint is normalized rate of investigator-assist Angioedema attacks.

Subjects will record this [inaudible] will review each event. The sample size of 32 per group supports power of more than 90% to detect a more than 50% reduction in a tax comparing either of the BCX7353 arms to placebo. After 50% of the subjects have completed 24 weeks, the blinded interim analysis will be done to check assumptions on sample size.

Secondary endpoints will include quality of life estimates. The subjects needed for long-term safety assessment will come from both the APeX-2 trial and a separate long-term safety study. Subjects in APeX-2 completing 24 weeks will roll over directly into a safety extension.

Those randomized to a 110 milligrams once a day or 150 milligrams once a day will continue at that dose level. And those randomized to placebo will roll over to 110 milligrams or 150 milligrams in a one-to-one ratio. Dosing will continue through a total of 48 weeks.

Analyses can be conducted when needed during this period to support regulatory submissions. Conservatively, we expect at least 20 subjects in each randomized directive drug in a Phase 3 APeX-2 trial continuing in the roll over through 48 weeks.

The separate long-term safety study APeX-S is an open label trial that randomize the subjects with Hereditary Angioedema to receive either 110 milligrams or 150 milligrams daily oral therapy for 48 weeks.

Approximately 80 subject per dose level and with trial up plan so that the total sample size to safety with 20 per dose level in the APeX-2 extension is 100 per dose level. The 75 subjects who participated in our Phase 2 APeX-1 trial will have the opportunity to enroll in the long-term safety study.

We will also expand eligibility to subjects who have not previously participated in a study of BCX7353. The goals of APeX-S are to evaluate long-term safety, quality of life and durability of response.

We are very excited about this program, now that it is moving to Phase 3 and my team is fully focused on executing all the work needed to start both the Phase 3 trial and the long-term safety study in the first quarter of next year.

Our company is looking forward to completing those studies and launching the first oral kallikrein inhibitor for the Hereditary Angioedema. Lynne Powell heads our commercial team. And before handing over to her, I’d like to provide some color on her background.

Lynne is an experienced rare disease commercial leader who came to us over two years ago following a very distinguish career at CSL, where she directed five global rare disease product launches for drugs in highly competitive markets, which now makeup roughly 70% of CSL’s revenue.

I’m confident that our clinical trials will provide Lynne and her team with a label that they need to want BCX7353 into competitive market and I’m thrilled that she is leading that launch. I’m now pleased to hand over to Lynne who will describe the opportunity that this drug represents..

Thanks, Bill. A someone who spent much of my career working in injectables, I am very excited to be developing what HAE patients want, a daily oral therapy to manage their disease. The HAE market in the US has undergone an evolution.

Prior to the US introduction in C1 Esterase Inhibitor in 2008, patients were fighting to survive due to the lack of effective therapists. This amounts that they have frequent hospitalization [inaudible] pain and were living attack to attack. Living a normal life was not a consideration, and many patients that we build till this is the dark years.

The introduction of Cinryze C1 Esterase Inhibitor which is a twice weekly IV infusion to patients out of the dark years and eliminates many tax. But this isn’t enough, as patients that’s still looking for more convenience in their HAE therapy in order to lead a normal life.

In September I attended an FDA HAE patient consultation meeting and a very articulate 20-year old women explained what it was like going to her school years with HAE. Unable to place boards, unable to participate in social events, unable to attend all classes and not living up to her full potential.

She was very excited for new therapies that are more convenient and allow fulfillment of patient’s potential.

We are now moving into a new era of HAE therapy that will provide patients and physicians with prophylactic therapies that works very well but are much more convenient to administer, an effective once a day oral therapy will provide this to patients.

We recently conducted market research amongst a 178 US HAE physicians that indicated convenience is just what they are looking for. Easier administration was the biggest unmet need ahead of cost coverage and then long-term efficacy.

At the FDA patient consultation meeting I spoke about earlier, a survey of patients shows that method of administration was the most important factor driving that treatment decisions, followed by insurance coverage. This is very similar to what physicians have indicated as the most important unmet need.

It is absolutely clear that as patients have emerged as of the dark years, efficacy is substantially improved and now what is important to them is improved convenience. I have worked in a number of mature rare disease market such as primary immune deficiency and hemophilia which behaved in a very similar manner.

Once efficacy is satisfied, patients start to look for convenience and the ability to live a normal life that allows them to reach that full potential. Estimated prevalence of HAE and US market size vary widely.

We want to trust a pain more accurate estimate so we carefully and conservatively identify an immediate target population of US diagnosed and treated HAE patients. This involved analyzing purchase claims data, a comprehensive market research and competitive sales data. This population is approximately 6,500 patients.

Of this population, approximately 50% is C1 Esterase Inhibitor Prophylactic therapy. As more convenient therapies are approved the launch, the market – the proportion of patients on prophylactic therapy will continue to grow the market far in excess of the current 1.5 billion.

I believe that has an effective once a day oral therapy, 7353 will be able to provide patients with the ability to feel normal and to achieve that full potential. Now I’ll hand over to Tom to review the financials..

Thank you, Lynne. I am pleased to discuss the details of our third quarter 2017 financial results. We closed the third quarter with a $169 million in cash and investments, reflecting proceeds from the completion of a $92 million public offering in mid-September. Importantly, this raise allows us to fund and complete two important activities.

Those activities are to complete the 7353 HAE proceed regulatory requirements to allow us to file an MD&A and an MAA, as well as to prepare [Technical Difficulty] our commercial infrastructure to successfully launch 7353. On slide 11, revenue for the third quarter of 2017 increased to $8.8 million from $7.8 million in the third quarter of 2016.

The increase related to larger collaborative revenue which included a $5 million milestone payment associated with the approval of our peramivir pediatric sNDA and also a $1.5 million of product sales to our Korean partner Green Cross to allow them to supply PeramiFlu in upcoming flu seasons.

These increases were somewhat offset by lower royalty revenue as Japanese government stock-piling recurred at a much lower level in the third quarter of 2017, as the stock-piling royalties decreased $2.8 million from the level in the third quarter of 2017.

Government stock-piling sales are very difficult to predict and have and will cause our peramivir revenue to fluctuate quarter-to-quarter in the future.

Research and development expenses for the third quarter of 2017 increased to $17.5 million from $14.1 million in the third quarter of 2016, primarily due to the increased development spending on the progression of our HAE portfolio, most notably 7353.

With the successful Apex-1 results and progression into pivotal development activities, a tranche of performance-based stock options vested in the related compensation expense was recorded in the third quarter of 2017.

These increases were somewhat offset by a decrease in 2017 galidesivir development expenses, which were incurred and funded under U.S. government development contracts. General and administrative expenses for the third quarter of 2017 were $3.3 million as compared to $2.8 million recorded in the third quarter of 2016.

This increase was largely related to stock option expense associated with the vesting of performance based options referred to in my comments on R&D expense. Moving below the operating line, we incurred $2.1 million of interest expense in the third quarter of 2017 as compared to $1.5 million in the third quarter of 2016.

This increase related to additional interest expense on our $23 million senior credit facility that we closed in September 2016. We also recorded a mark-to-market hedge gain of $84,000 as compared to a mark-to-market hedge loss of $931,000 in the third quarter of 2016. The gains and losses results solely from the periodic changes in the U.S.

dollar Japanese Yen exchange rate between quarters. The net loss for the third quarter of 2017 was $15.1 million or $0.18 per share, compared to a net loss of a $11.5 million or a $0.16 per share loss for the third quarter of 2016.

Moving on to slide 12, we ended September 2017 with cash and investments of a $169.3 million, an increase of over a $104 million from our cash and investment balance at the end of fiscal 2016.

Our 2017 public offerings resulted in the substantial strengthening of our financial position and these financings provide the financial liquidity to accomplish critical activities to realize value in our 7353 program.

With this added cash, we are now appropriately resourced to execute on our agreed regulatory requirements and to invest in launch preparation and commercialization to be successful in the competitive HAE market. Whereby an oral prophylactic is the patient and physician’s overwhelming choice for living a normal life with HAE disease.

Our operating cash usage for the third quarter of 2017 was $10.6 million and reflects a decrease as compared to the $14.8 million utilized in the third quarter of 2016. We believe our existing cash and investments will provide at least two years of cash runway. Our cash forecast however, does not assume any influx of non-routine cash inflows.

So any realization of these inflows would extend our forecasted cash runway further into the future. In regards to our 2017 forecasted results, we continue to expect to be within the upper half of our cash guidance range of $30 million to $50 million and to be in the upper half of our operating expense guidance range of $53 million to $73 million.

As a reminder, equity based compensation expense is excluded from our operating expense guidance. That completes my review. And I’ll turn the call back over to Jon..

Thanks, Tom. Let me conclude by saying once again the opportunity in front of us is significant and we are determined to make the most of this opportunity. The market is large and growing, 7353 has the profile patients and doctors have been waiting for, and the plan to get through approval is clear and it’s now time to execute.

We look forward to updating you as we execute our plan. That’s it for our prepared remarks. We’ll now open it up for your questions..

[Operator Instructions] Our first question comes from the line of Jessica Fye with JPMorgan. Your line is now open..

Great. Thanks for taking my questions. I’m trying to think about the pining of the long-term safety study.

Will you open that for a moment while APeX-2 is enrolling or wait until that’s fully enrolls? And can you help me understand how patients would get into one versus the other to the extent they are enrolling simultaneously? Can you also remind us when the preclinical [inaudible] study readouts.

And then on APeX-2, I think you mentioned that after 50% of the patients complete 24 weeks, they’re going to do a blinded interim to assess the powering assumptions. What are the potential outcomes depending on what that planned interim looks like? Thank you..

Bill you want to take those?.

Sure. In fact Jessica, thanks for the questions. With regards to the long-term safety study, we have 75 subjects who participated in our Phase 2 study.

And they are all potentially eligible to come straight into the long-term safety study when we started, so that we no need to wait until the Phase 3 efficacy study has subjects rolling over before we start accruing patients for the long-term safety study.

We’ll be managing, we will implement things and so that we optimize enrollment into the randomize placebo control study and optimize enrollment into long-term safety study and at the appropriate time we’ll have the opportunity to open up the long-term safety study to BCX7353 naïve patients as well, as having a APeX-1 and APeX-2 patients.

With regard to the [inaudible] program, that’s well advanced, and it’s not going to be right limiting for filing, they seem to come together in 2019 but it’s well advanced. And the non-clinical safety program in general is except for that essentially complete.

With regard to the interim analysis to check our assumptions, what that will consist of is a completely blinded analysis of the variance in a [inaudible] pulling all of the data, and it’s a check on the assumption around variance. The potential outcomes are no changes, we’ll have modest increase in sample size.

I’m expecting there will be no changes but it’s good, discipline in clinical development and there is an FDA, actually there is no SCH guidance that encourages sponsors to include that type of analysis in pivotal studies..

Okay..

So Jessica just let me, let me just correct one thing that you said, you said that 24 weeks there would be the interim on APeX-2 and my understanding is when it’s half way enroll that we would do the interim.

Is that correct Bill?.

Yeah, half the patients through 24 weeks, that’s right..

Yeah..

Okay.

And what’s a enrollment criteria that you’re looking out for APeX-2? What’s your expectation for the baseline attack rate in the APeX-2 population?.

Yeah, that’s a very interesting question. And we had a recent example, so the antibody study was presented at the college meeting. They have to basically one a month eligibility criteria. People had a lot of attacks here in screening but on study, the placebo attack rate was two per month.

So I think generally our experience has been that you get approximately twice the main on study as the minimum attack rate, so if that happens in APeX-2, then we’ll probably have two a month..

Yeah, that’s an important piece of new information Jess is that by opening the enrollment to a less frequent attack rate, it opens up a pretty sizable population that we otherwise couldn’t have recruited. And we’re able to do that because we’re going to track them for a longer period of time..

Understood, okay. Great. Thank you..

You’re welcome..

Thank you. Our next question comes from the line of Charles Duncan with Piper Jaffray. Your line is now open..

Hi guys, thanks for taking the question and congrats on the progress in the quarter. Wondering about the screening period six weeks versus I think in the past study X1 was three weeks.

How do you believe this could impact if you will the variance that you’ve referred to in the last questions in terms of the attack rate frequency?.

Bill you want, want to take that?.

Sure. Thanks Charles.

So I think the purpose of the screening period is twofold, one is to make sure that we have subjects who can follow our – the procedures that we’re recording attacks in the [inaudible] and that’s not a high bar but we want to make sure that we don’t have subjects getting randomized to, we won’t be able to complete the requirements to follow the primary endpoint of the study.

The second is to make sure that they are actually having attacks. And their expectation is that the vast majority of subjects will qualify very quickly. So, we are still finalizing the protocol obviously, we’ll get it submitted and hope to start in, and we will start in the first quarter.

The duration of the screening period is likely to be a minimum of two weeks. We may extend the six weeks by another couple of weeks, but it’s not going to affect in any substantial way the variance of the placebo attack rate on study.

As I mentioned a couple of minutes ago, in the study that was just presented a couple of weeks ago, the attack rate during the screening period was actually quite high, that’s a little unusual but I have every confidence that we’ll have an adequate screening period that we’ll have plenty of paper qualifying and that we’ll likely see the same type of phenomenon we see in other studies with, the main on study attack rate will be about twice the minimum criteria..

Okay. And then regarding the hovering assumption that you’ve mentioned 90% to [inaudible] greater than or equal to 50% reduction, in the past we’ve always talk about call it 70%, 75% reduction being clinically important.

But when you’re talking here little bit about 50%, does that reflect a change in the criteria for clinical value or is that just a way to state the powering?.

Yeah, thanks. So it’s purely a way to state the power assumption. In the work we do to make sure that we have adequate sample size for a study of this nature, we do very extensive powering modeling and create more sorts of tables.

This is a summary statement, so if I have to say that we had P values of 0.001 in the like our Phase 2 study with sample sizes of 14 per group and 18 per group and 22 placebos and we should have no problem getting small P values and replicating those results in a Phase 3 study with 32 per group. It’s just the way of studying the powering assumption..

But still your target is something perhaps north of 50% reduction in attack rate?.

The more – absolute – more is always better and the – if you recollect the APeX-1 final results presentation that we made a couple of months back, we had a table in there about slicing and dicing the baiter in different ways and we got 73%, 72% in eight different analyses of the data.

So, it’s pretty robust at the 125 milligram dose level in that study, so we expect to be able to replicate that..

And then last question in terms of clinical trial size, could you give us some sense of what percentage of these sites or patients will be in US versus ex-US? And then you talk about starting in the first quarter for APeX-2, could that be January versus March or any further color on that?.

Bill you might take the first part, I’ll take the second..

Sure.

So, and I think that the number of sites and the distribution of sites and the distribution of patients, I think that the US is quick [inaudible] compared to countries in Europe that’s just the way the regulatory process works in terms of [inaudible], so we expect that US sites will start first and then EU starts, what we’ve seen at patient meetings and in talking to investigators is that as Lynne eloquently pointed out, there is a lot of enthusiasm for a once a day oral.

If that translates into rapid enrollment, then it’s a possible that most of the subjects will come from the US. When we ran the OPuS-2 study with the first generation compound, it was roughly balanced between US and Europe in terms of patient volume.

We’ll have the right number of sites to get the patients we need and the time we need and I’m not advertising a particular number of sites, but you can be completely confident that we’ll have the sites that we need..

Yeah, and I would just add to that that haven’t been at the patient summit in September at Minneapolis and then at the college meeting with a lot of the people who will be our investigators in the US a couple of weeks ago in Boston, of all the studies we’ve ever done I’ve never seen enthusiasm for a trial at BioCryst like I’ve seen for this one.

And so, hopefully that translates into a lot of sites wanting to participate and a lot of patients wanting to get into the study. In terms of the timing of when we start, Charles, I’m not going to put anymore fidelity than first quarter.

Count on us to go as fast as we can, and I think the fact that we now know what the design is, we’re locked on the protocol, there is a lot of early work in terms of getting sites up and ready, getting IRB approvals in the US and all of that stuff that takes a bit of time, but you can imagine that it’s full speed ahead at BioCryst right now..

Okay, good. Thanks for the added info..

You’re welcome..

Thank you. Our next question comes from the line of Liisa Bayko with JMP Securities. Your line is now open..

Hi, good morning and congratulations on the great quarter. And just a couple of questions for you.

First of all, can you talk about just the station population and that you’re going to recruiting an APeX-2 and what kind of background that’s relating on?.

Bill, you want to take that?.

Sure. Thanks for the question Liisa. Subjects can be on stable background medications, in some cases they may have to have a dose change or an alternative antihypertensive agent or anti-lipid to lack depending on whether the medication is metabolized by [inaudible] specific sip-ins on.

So we have very crystal clear instructions in the protocol and very easy to follow check list for the investigators and I anticipated there will be a broad range of concomitant medications in the study. Just as a footnote also, obviously this is a study of a prophylactic medicine of HAE.

All of the subjects will have access to the usual acute attack medicines and use them as they need, but they won’t be allowed to take other prophylactic medicines for HAE obviously..

Okay, that’s helpful.

And will you include patients that had [inaudible]?.

Yes, sure. I’d be investing the case in all the prophylactic studies and I can’t remember the exact number but a very large proportion of the subjects in APeX-1 and OPuS-2 and OPuS-1 have had at least one [inaudible] attack..

Okay, great. Thanks. And then maybe you could just comment a little bit more on dose of Phase 1 with150 milligram which I guess equates to 175 milligram in orals expression of dose.

Can you maybe comment on kind of what sort of increase in exposure you see there and why you intend to that dose of close to let’s a 200 or which I don’t know what that would resemble you to but you know what I’m trying to saying maybe a little bit granularity on your modeling and how you came to that as a second dose? Thanks..

Yeah, I’d be very happy to. So, as you recall and I’ll just use the salt terminology because it’s just simpler to reference back to that for APeX-1 for the purpose of this question. So we had a 125 milligrams, 250 milligrams and 350 milligrams, the 62.5 milligram dose didn’t work, and we’re not studying that anymore.

125 milligrams looks very good, and what we wanted to do was estimate a intermediate dose that would have a good enough increase in exposure to expect that we might be able to pick up an incrementing efficacy.

So, just so that for those who didn’t listen to that call, the increase in exposure going from a 125 milligrams to 250 milligrams which is a doubling of dose was a threefold increase in exposure.

So we were able to take all of the data from our size one healthy volunteer study in our Phase 2 hereditary angioedema study where we had very detailed PK and we were able to model by interpolation and also using a more sophisticated PK modeling, what would be the expected exposure at different dose levels.

And we chose at those level with a 175, because it was approximately twice the exposure compared to the 125 milligrams, so that you can look at PK parameters like you’re under the curve for example. So it gives you about twice the exposure.

The second thing we did is model – the proportion of subjects whose trough level of drug would be above thresholds through efficacy, and we took a look at different thresholds including four times and six times the EC 50 for kallikrein for example.

And we pick up most of the remaining subjects by increasing the dose from a 125 milligram to a 175 milligram. So on both fronts, we think the PK modeling gives us a very good chance of showing a bump in efficacy at the 175 milligrams dose..

Yeah, I would add Liisa that at the Boston college, allergy college meeting, there was a poster from the compact study that [inaudible] presented and I think they’re honing in on this target range a bit more based on the efficacy that they saw and the trough levels of C1 inhibitor.

And if four to six times the EC 50 is that range, the 175 milligram dose you go from 125 to 175, you go from 70% of people being above four times the EC 50 to 93%, so almost all of them. And at six times EC 50 you go from 38% to 80%, so that’s why we chose the dose..

Okay.

And you feel like you don’t really want to go much higher than that?.

I don’t think there is a need. I don’t think there is a need..

Okay.

And MAA timing I guess was a trial after [Technical Difficult]?.

Yeah, we’re going to try to file as close together as we can. The good news is, the concordance of feedback is very high and so these trials will apply to both regions for approval..

Okay, great.

And then just final question for me, are you working on any next gen kind of compounds that are [inaudible]?.

So are you – is that question around kallikrein or is that question around other targets?.

Kallikrein..

Yeah, so we continue – okay. So we continue to explore other kallikrein inhibitors and potentially other indications and that work is ongoing. And then as we’ve mentioned in the past, our discover team is working on two other targets that are not kallikrein.

But the diseases are rare diseases, the targets are validated and in one situation, it’s a disease similar to HAE where there is an injectable drug that’s approved in a sizable market and we want to bring it oral, and in the other one there is nothing.

But patients die at a relatively early age, and so we think that again bringing an oral drug into that space would be extremely valuable. So more on that as we progress those programs..

Thank you..

You’re welcome..

Thank you. Our next question comes from the line of Maury Raycroft with Jefferies. Your line is now open..

Hi, congrats on the update and progress. Wondering based on the APeX-1 study, it seems like you have some individual patients, you tend to have more abdominal only APeX.

And from the Phase 3 screening period, I’m wondering you feel potentially screen out some of those patient that may have a higher frequency of abdominal only APeX?.

Bill, you want to take that one?.

Sure. No we weren’t. I think that we’re very comfortable with the dose selection that we’ve got for the APeX-2 study and the 125 milligram dose level data out of which corresponds to the 110 milligram and expresses the base in APeX-2, that dose level in APeX-1 had a very safe more tolerated profile and low frequency of GI events.

I think that we want to have the broadest label possible for this drug and so it might be problematic in fact to exclude patients who have abdominal events, they’re pretty common events in HAE where we want to be able to prevent those too..

Yeah, I – and what I’d add more is, the issue is around the confusion of the adverse events at higher doses and higher exposures with the early symptoms of an abdominal attack. So it’s not that our drug will treat abdominal attacks as you saw in 125 milligram dose it did a fine job.

So, the key to solving that problem is chose the doses that don’t have those GIAEs, that’s the way to fix it..

Got it.

And I guess along those lines, I’m wondering if you’ve come up with a strategy that could be implemented it the Phase 3 to educate patients on differentiating some of the abdominal effects?.

Yeah, we’ll definitely do that. We did a little bit of that in a tail end of APeX-1 but we’ll do more of that in APeX-2, but again I would stress that if you don’t have GIAEs, the likelihood that you’ll see that goes down.

And I think also the fact that it’s a longer study, I think being able to manage through is also I think more advantageous when you have a longer study. So, I think we’re in good shape..

Great, okay. Thank you very much..

You’re welcome..

Thank you. Our next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open..

Hey, thanks for taking my question, and congrats as well on the regulatory progress. First question is on the APeX-S study.

Can you talk a little bit about the criteria, the types of patients you’ll be including in that amongst the 7353 naïve population? And how far along do you need to be with that study before you file the NDA?.

Bill, you want to take that?.

Sure. Thanks for the question Brian.

So, it’s being written as quite a broad eligibility to think of it as if the patient is in otherwise good health obviously, and they and their physician believe that they might benefit from prophylactic treatment with that drug, that’s the thinking behind crafting ultimately the eligibility for the long-term safety study.

We want to have that be pretty representative of the way the drug is going to get used in real life medical practice once it’s proved. Now I’m blocking on the second part of your question I’m sorry. Could you….

How far along you’ll need to be before you file the NDA?.

Oh yeah, all right. Yeah, so I think that’s a very good question, and we’ll be tracking the number of subjects who complete 48 weeks of dosing with both doses. For sure we will be able to file the NDA once we get to a 100 of both doses for sure.

But on the other hand, by that team we’ll obviously have the 24 week efficacy and safety results coming out of the final efficacy analysis of the pivotal trial. And that will I’m sure influence thinking about how much safety data need to go into the file when it’s submitted.

There is also an opportunity to update the safety data base during the review at a six month time point. So, we’ll be discussing once we get to that point with the relevant agencies both in the US and Europe the timing of the filing..

Got it, okay that’s helpful. And then just following up an earlier question, Bill I think you mentioned potential outcomes for the interim analysis would be, there are no changes or modest increase in sample size.

Just wanted to confirm whether there might be any trigger for potential trial stoppage on either efficacy or futility at that point?.

So, the answer is no. And it’s purely a blinded analysis of the variance that have proved attack rate. There are no efficacy comparisons being done at all, there is no alpha spend, so there is no futility analysis, no stopping rule..

Got it. And then….

Yeah, that’s a really important point.

This isn’t something to get a sense of the efficacy is more of the distribution of attack rate that we’re seeing and where our estimates right or not and then reside, and the likelihood that that’ll happen as well but I think it’s a smart – as Bill said, it’s part of the ICH guidelines and it’s the smart thing to have built in..

Yeah, no that makes sense and that’s helpful clarity on that.

And then I guess speaking of alpha, so what’s required in terms of P value for this final analysis of the study on the primary endpoint, do you need to hit on both doses or one or the other, is there like I said, did you start with the high dose and then move to the low dose, how does that analysis statistically work?.

Bill, it might be good for you to go through the hot berg and just help him understand it..

So, first of all what are the requirements for success. So a really important point here is, and this goes along with the regulatory precedent in this disease, it’s a rare disease. And in common diseases, regulatory agencies typically want to have two pivotal studies, that’s not the case here, we have one pivotal study.

And there is regulatory guidance on the stringency of one pivotal study, so you have to be more confident in the outcome of one pivotal study in order to use that as your criteria to approve the drug. Nobody will tell you well you have to hit a P value of 0.0 something or rather, but the P value of 0.04 for example wouldn’t be good enough.

The P value of 0.005 or something like that certainly would be good enough. So, I think that we’re very confident on the basis of the APeX-1 results that will have no problem getting low P value. So in general, people tend to talk about 0.01 or less being the requirement when you only have one pivotal study, so that’s the first part of your question.

The second part of your question was how to handle multiplicity. So there is one placebo group that is compared to two – that’s going to be compared to two active groups.

There is a procedure called [inaudible] step up procedure which ranks the P values and provided the top P value as less than 0.05, that qualifies with whichever of those two groups has that highest P value, and then you go to the next one and you apply a multiplicity adjustment there, and again cutting it to 0.025 is not an issue given the results of the APeX-1 study..

Very helpful. Thanks again..

You’re welcome..

Thank you. Our next question comes from the line of Serge Belanger with Needham & Company. Your line is now open..

Hi, good morning. A couple of questions on the APeX-2 study design. I think Jon in the last call that you talked about the Phase 3 potentially be 12 to 16 weeks of duration. I assume the 24 weeks was the result of FDA or EMA input.

And then second question is, now that you’re taking the long-term safety evaluation with both doses, does that get you to a position where you can file for both the dosage?.

Bill, you want to take that?.

Yeah, sure. Serge, you’re absolutely right. So having both doses in the efficacy study and both doses in the long-term safety study gives you the maximum flexibility for what you’re putting your label.

So let’s assume for argument sake that the efficacy at 175 looks a bit better and it’s just to say from a [inaudible] as the lower dose then we want to have both doses on the label, and having safety at both doses supports that. So it basically allows you to go forward with both doses.

It also allows in the event for example that there was an issue with tolerability at the higher dose, if everything worked out fine at the lower dose, then you’ve got all of the information you need to file for that and get it labeled..

Okay. And then the 24 weeks endpoint versus 16 weeks, was that….

Yes, yes absolutely, you’re correct there as well. So I think that the – the abstract here really is that there is now a precedent in the field that studies of approximately 24 weeks to 26 weeks in duration the standard for approval of new drugs for prophylaxis in HAE.

And it gives us a very, very robust placebo comparison for safety as well as for efficacy for that 24 weeks obviously, so we have no problem with that guidance and it should be a great study..

Yeah, and as I mentioned before Serge, it opens us up to lower attack rate in terms of entry criteria which opens up another sizable portion of the population of HAE patients..

Okay. And then just a broader HAE market question, you mentioned the 6,500 patients in the US, half of them on prophylactics.

What about the other half? Is it just a question of not happy with the efficacy of available treatments or lack of payer coverage or they’re being treated with the execute treatments?.

Thanks for the question. The – so as I said, half around C1 Esterase Inhibitor. The other half is split between quite a large proportion of that 50% on androgens and acute – and also a proportion on acute therapies.

And then there is quite an interesting other proportion that use acute therapies in a prophylactic manner, so that second half is an additional target for us because those patients may well want to have the convenience of once a day oral as well..

Okay.

And in terms of payer coverage, how would you describe it and is there a number of step throughs of acute therapies before prophylactic therapies approved?.

From the initial prior research that we have done, we haven’t seen that the step that it’s required to go through acute. And at this stage we see that payers are looking to sub cover all prophylactic therapies..

Okay, thank you..

You’re welcome..

Thank you. Our next question comes from the line of Tazeen Ahmad with Bank of America. Your line is now open..

Hi, good morning. Thanks for taking my questions. Jon, I just wanted to clarify maybe I missed it earlier in your talk about how many sites you will be having for the Phase 3 program, and do you know if any of those sites might also currently be involved in any other HAE studies? And then I have a follow-up on financials..

Yeah, I think there is actually a interesting window for us to enroll this study right now where, of course, there are other studies but a lot of the big ones have ramped down.

And so what KOLs tell us and the investigators tell us is that there is a window here that we have at the beginning of this coming year and the first half of year, or next year excuse me, to enroll patients.

In terms of size, like I said before, I could see a good portion of the patients coming from the US for two years, one as Bill said, patients or the sites get up and running faster, there is APeX and confident authority approvals in Europe that just historically have taken us longer to get approvals, and so European sites come up a little bit slower than US sites.

And I really think – given that we can’t use the APeX-1 patients for APeX-2 but we can use them in APeX-S, there’ll be less of a pool to choose from because we haven’t had any patients in the US on 7353, so there’ll be less to choose to from in Europe.

And I – there is a lot of enthusiasm in the US for getting on this study, at the patients summit in Minneapolis in September, we were approached by many, many, many patients enquiring about how to get involved in the study. So, it’s always hard to predict enrollment.

Bill will always tell you it’s never easy and there is always challenges and competing studies, but I’d like our chances of getting this enrolled in a good pace..

So keeping that in mind, if you start the study in the first quarter, is it realistic to think that we could have an interim read around mid-year or would that be too aggressive in assumption?.

Interim read in mid ’18, no, no. So the way that study is designed is it’s 24 weeks and then we do the final efficacy analysis after all patients have completed the 24 weeks, and we’ve said that we expect that data in the first half of 2019, that hasn’t changed..

Okay, so maybe I misunderstood what you meant by interim read.

Is there going to be an interim read and is there – would you make that public?.

Yes. It’s real important that you understand this one, this is purely for sizing purposes to make sure that our assumptions around attack rate especially in the placebo arm and the distribution of the tax is accurate, and it’s blinded. So no, there won’t be any report out other than if we change the size of the study.

And again, the likelihood of that is low..

Okay, thanks for clarifying..

Sorry just to be crystal – yeah, to be crystal clear for everybody listening, there is no interim analysis of efficacy at all in the study..

Yeah..

Okay. And then the second question is for Tom and sorry if I’m going to put you on the spot on this but there is a proposal from House Republicans as part of their tax reform bill to eliminate tax credits for Orphan Drugs.

And so I wanted to get your thoughts, I know that Jon probably announced several questions ago did mentioned that you guys are still investing in your pipeline and do you have other areas that you’d like to focus on once you get HAE approved in the first half at, but how are you thinking about the importance of that tax credit, and would that impact you, should that tax credit go away? Thanks..

Yeah, so obviously those tax credits are important to many more companies other than to BioCryst and we’re all waiting to see what happens. There has been a lot of proposals that have come and gone over the last couple of years and especially with the current administration.

So, the good news for us is, certainly if they take the tax credit away, that would not be a good thing, but if you have good drugs that satisfy a medical need, people are going to for it and as a loss generating company, we have a lot of tax advantages outside R&D credits.

So, I’ll worry about that in three or four years after we get some good drugs approved, but at this point, I’m not worried at all about that..

Yeah, the tax – the tax credit in comparison to a $2 billion market is tiny, tiny. So I don’t think it’s….

How much does….

Personally I don’t think it’s going to discourage a lot of companies from not going after rare diseases, that’s my opinion..

Okay.

So how much do the R&D tax credits for example contribute to your current NOLs?.

So that’s – I don’t have that on the top of my head but that’s disclosed in our last 10-K, I mean it’s a significant portion, I won’t say a significant portion, it is a portion of our thing but it wouldn’t be retroactive.

So all the tax credits that we have now are going to be applied in the future, and you’re just talking about perspective loss of tax credit. And like I said, I don’t think Bio and Pharma are going to let that go without a significant fight because that just hurts innovation in the industry..

Okay, thanks for your thoughts..

Sure..

Thank you. And I’m showing no further questions in queue at this time. I would like to turn the conference back over to Jon Stonehouse for closing remarks..

Yeah, so again really appreciate all the interest and it’s a really exciting time for BioCryst. We’re heading into a Phase 3, we’re on the home stretch and we’re actually gearing up our commercial readiness to be able to launch this in a competitive market with a great profile drug.

So, we look forward to continuing to keep you updated, and have a great day..

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Everyone have a great day..