BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q3 2022 Earnings Conference Call November 1, 2022 8:30 AM ET
Company Participants
John Bluth – SVP, IR and Corporate Communications
Jon Stonehouse – Chief Executive Officer
Anthony Doyle – Chief Financial Officer
Charlie Gayer – Chief Commercial Officer
Helen Thackray – Chief R&D Officer
Conference Call Participants
Ken Cacciatore – Cowen and Company
Chris Raymond – Piper Sandler
Daniel Wolle – JPMorgan
Joe Spak – RBC Capital
Jon Wolleben – JMP Securities
Gena Wang – Barclays
Justin Kim – Oppenheimer & Company
Tazeen Ahmad – Bank of America
Rohit Bhasin – Needham & Company
Maury Raycroft – Jefferies
Operator
Hello, and welcome to the BioCryst Third Quarter 2022 Earnings Conference Call. My name is Michelle and I will be your operator for today’s conference. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session [Operator Instructions] As a reminder, the conference is being recorded.
I will now turn the call over to Mr. John Bluth with BioCryst. Sir, you may begin.
John Bluth
Thanks Michelle. Good morning, and welcome to BioCryst’s third quarter 2022 corporate update and financial results conference call. Today’s press release and accompanying slides are available on our website. Participating with me today are CEO, Jon Stonehouse; CFO, Anthony Doyle; Chief Commercial Officer, Charlie Gayer; and Chief R&D Officer, Dr. Helen Thackray. Following our remarks, we will answer your questions.
Before we begin, please note that 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 may 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 can be accessed on our website.
I’d now like to turn the call over to Jon Stonehouse.
Jon Stonehouse
Thanks John. We continue to see steady progress with the ORLADEYO launch, and underlying growth trends remain strong. New patient starts are consistent with previous quarters, discontinuations appear to have stabilized, and we are investing more to keep this momentum going.
Based on our expectations for continued growth in Q4, we plan to exit 2022, having more than doubled sales from the great start we had last year, and we’ll be a quarter of the way to our expected peak of $1 billion globally in just the second year of launch.
We’ve shown you long-term data from our trials and we will continue to show you real world data that our drug works very well in many patients. The competitive landscape has changed, too, and is a reminder of how challenging it is to pursue a strategy of oral drugs in HAE.
Right now, and perhaps for some time to come, ORLADEYO is the only direct-acting oral with once daily dosing to prevent HAE attacks. With this unique offering and product profile, we believe this is a therapy every patient should have the opportunity to try to see if it works for them. Charlie will share more specifics on the ORLADEYO quarter performance in a minute.
Our strategy of going after challenging targets, specifically serine proteases for patients suffering from rare diseases, is rooted in our ability to discover potent, specific, and bioavailable molecule.
In the case of HAE, we were able to do that — do what others haven’t; develop an oral once-daily kallikrein inhibitor. We believe this allows us to offer something unique to these patients, and we believe HAE is just the start.
In addition, because these are difficult targets, we don’t stop at the first molecule we discover. We work on improved next-generation compounds. We saw that with AVORALSTAT and ORLADEYO.
We believe we’ve done it again with Factor D. We are fortunate to have two molecules again, and that puts us in a position to potentially have the first oral Factor D monotherapy molecule to market and the next generation that perhaps will be the best.
While the future of 9930 is still to be determined, our expectation is we will get an answer to our hypothesis on data from the first 15 or so patients treated for two to three months by the middle of next year.
We have also been working on additional next-generation complement inhibitors, including BCX10013, a potential once-daily oral Factor D inhibitor that we have advanced into the clinic.
In Q1 of next year, we plan to show you data in humans that supports the potential of once-daily dosing. Our plan is to go into rare disease patients in dose-ranging proof-of-concept studies with 10013 next year as well. But we won’t stop there.
The complement system is complex and blocking more than one pathway allows us to go after more rare diseases and may be necessary to successfully treat some patients. So we also have a discovery effort and we’re making great progress on other targets in the complement system. If successful, we’ll be able to go after other rare diseases and possibly combine molecules to make the best therapy in one capsule or tablet. We plan to show you more in an R&D Day next year.
So, the goal, simply stated, is to be the global leader in complement, simple to state, but very challenging to do. We believe this strategy in our discovery platform allows us to do things others may not be able to do and we look forward to showcasing it to you next year.
So, what does this mean for you as a shareholder? It starts with the evidence that we can successfully discover, develop and launch an oral drug directed at a challenging target that offers something unique to patients.
The result we expect is ORLADEYO will fill an unmet need for thousands of HAE patients and will reach $1 billion in global peak sales. That is a major accomplishment that sets us apart to create meaningful value for patients and shareholders.
And we plan to do it again in complement, but not with one molecule or one pathway. Imagine many molecules for multiple pathways making the best and unique therapies others may not. That value is many, many more patients and potentially multiples of ORLADEYO peak sales.
Now, I’ll turn the call over to Charlie to go over the ORLADEYO performance.
Charlie Gayer
Thanks Jon. The core metrics for ORLADEYO were strong once again in the third quarter. New patient starts were right in line with our six quarter running average, the absolute number of discontinuations was flat to slightly improved for the second quarter in a row, and we saw a 9% growth in patients on paid therapy.
All these metrics point to what we have described previously: a pattern of consistent linear growth for ORLADEYO. I’ll share more detail on what we saw in the quarter, and later Anthony will provide context for how patient growth translated to revenue.
We continue to add breadth and depth to the ORLADEYO prescriber base and several facts point to our ability to expand ORLADEYO use. The overall prescriber base grew by another 11% in Q3 and we had the largest number of repeat prescribers in the quarter as more physicians offer ORLADEYO to additional patients in their practices.
Top 500 HAE treaters accounted for 54% of new ORLADEYO prescriptions and about 25% of top 500 prescribers in Q3 were newly activated. We also had the largest number of Tier 2 prescribers in any quarter to-date.
These trends are consistent with another survey that we conducted with 60 allergists in September. As we have seen in prior surveys, physicians anticipated the percentage of their patients treated with ORLADEYO would grow more than any other HAE therapy over the next 12 months.
They anticipate expanding use because they have seen our long-term clinical data. Many also have firsthand experience with ORLADEYO. And our physician survey shows that ORLADEYO is the most requested HAE prophylaxis medication amongst patients.
Next week, at the American College of Asthma, Allergy & Immunology Congress, we will have an oral presentation and a poster from large cohorts of patients who started on ORLADEYO after the launch. This real-world evidence confirms what physicians are seeing. Regardless of baseline attack rate or prior therapy, patients experienced excellent long-term control.
Even with the success we’ve seen since launch, we constantly evaluate opportunities to invest to do more. In Q3, we identified two such opportunities. The first is to add incrementally to our sales team to further accelerate impact in top 500 physicians. The second is to add to our field market access team so that as we broaden our prescriber base, we can help practices that have less experience seeking payer authorization for HAE therapies.
As we round out the second year on the market for ORLADEYO, we are excited about the future potential. One month into this quarter, our underlying metrics remained strong. We expect to see a double-digit revenue growth percentage in the fourth quarter with total ORLADEYO sales for the year ending at $255 million, more than doubling 2021 sales.
Helen, I’ll turn the call over to you.
Helen Thackray
Thanks Charlie. Today, I’ll discuss a few significant updates on our pipeline programs, including progress with our current molecules and our future goals for advancing multiple new drug candidates to treat complement-mediated diseases.
As we continue to advance our pipeline, an important goal, which we believe is achievable, is to bring novel orally delivered products forward to treat many complement-mediated diseases. Our vision is to be the global leader in delivering medications targeting dysfunction across the complement system.
What’s new at BioCryst today is some important progress we’ve made towards that vision. We have expanded our Factor D inhibitor program towards targeting the alternative pathway with a second potentially best-in-class molecule in the clinic. And we’ve identified several additional targets where there is potential for oral drugs to address the other major pathways of the complement system.
Our discovery team has already made progress towards generating molecules for each of these targets, giving us confidence that our unique discovery platform has the capability to produce oral drugs for these challenging targets. If successful, this would multiply our opportunities to treat diseases mediated by dysregulation of the complement cascade.
So, in total, we are not only adding a second oral Factor D inhibitor to our portfolio for the alternative pathway, but also building the potential for multiple additional oral drugs to address diseases across the complement system, including those with the classical pathway, lectin pathway, and terminal pathway.
We intend to invest in the development of a number of oral medicines for these targets. If we are successful in delivering oral treatments for more than one pathway in the complement system, imagine also the possibility of addressing several pathways at once with combined oral drugs. This could expand treatment opportunities even further with monotherapy, single pathway approaches, and with combination multiple pathway approaches for treatment of the most complex or serious diseases.
Now, I’ll go into some of the specifics, illustrating why we believe we can deliver both the first and then a best-in-class oral monotherapy Factor D inhibitor for our program targeting the alternative pathway.
Overall, the goals of this program are twofold; one, to quickly bring a first molecule to market, putting BioCryst in a position to deliver the first safe and effective oral monotherapy Factor D inhibitor to patients across multiple complement-mediated diseases.
BCX9930 has the potential to achieve this, and our near-term focus is on assessing swiftly and efficiently whether we have successfully identified a safe and effective dose regimen that will keep our REDEEM pivotal trial in PNH on a path to registration.
And two, to continue to produce an advanced unique new molecules to achieve best-in-class outcomes for patients. By this, we mean molecules that bring some combination of improved potency improved safety, or with longer exposure at therapeutic levels with oral delivery. And even more specifically, we mean a therapy that is differentiated in the field by delivering a safe and effective therapy in a once-daily dose. We did this with ORLADEYO, and we believe we can do it again.
With BCX9930, we’ve made steady progress towards reinitiating enrollment with the pivotal program. We’ve begun screening new patients for enrollment in the REDEEM trials and are gaining some initial experience at the lower dose in patients already on our studies.
You will remember that we amended the REDEEM and RENEW protocols with a new dosing regimen of 400 milligrams twice daily with a brief step up at the start of dosing in our effort to confirm a safe and effective dose for BCX9930.
Our hypothesis is that this new dosing regimen, together with attention to simple hydration, may prevent the rise in serum creatinine observed in some patients previously at 500 milligrams twice daily. All patients who continue on BCX9930 have been switched from 500 milligrams to a lower dose.
At this point, and with initial and limited experience, it is too early to draw any conclusions about the success of these steps. Of course, if we observe something that warrants holding or discontinuing the program, we will update you earlier as that occurs.
Otherwise, our plan is to bring an update mid-2023 with more robust data from approximately 15 newly enrolled patients. If the new dosing regimen resolves the observations of renal injury, our plan would be to invest fully in the pivotal program and bring BCX9930 to market as quickly as possible. And if this is not demonstrated, we will discontinue the program.
In addition, as I mentioned earlier, we are also advancing BCX-10013 as the second unique molecule with the potential to be a differentiated product for the proximal alternative pathway of complement with once-daily dosing.
BCX10013 has been moving at full speed for some time and as a result is already in the clinic. We are reporting today that BCX10013 is being as best in healthy therapeutic dose levels with single ascending doses and multiple ascending doses.
Approximately 90 healthy volunteers have been dosed with BCX10013 at this point. and so far, we have observed an initial safety, tolerability and PK profile that’s not only support of advancing into evaluation in patients, but also looks promising for once-daily dosing.
Our plan is to initiate patient studies to confirm the best dose level for advancement into a registration program. We’ll have more to share with you about the data and the plan for this program in first quarter 2023.
Finally, another pipeline update, I’ll turn to BCX9250 and FOP. Here, the competitive landscape for the ultra-rare disease — this ultra-rare disease is increasingly crowded, including with several late-stage programs assessing the same mechanism of action for the treatment of this disease of BCX9250, that of ALK-2 inhibition.
We have concluded that it’s increasingly likely the needs of patients here may be served by other products before BCX9250 can achieve registration. We are, therefore, discontinuing development of BCX9250 and redirecting the investment of this program towards our many opportunities and complements.
To conclude today’s update on our pipeline, I’ll repeat a theme you’ve heard from us before. We have succeeded with delivering orally administrated — orally administered small molecules for challenging targets. This capability gives us very high confidence that we can achieve our goal discussed today to deliver oral drugs across multiple very difficult targets in the complement system.
Now I’ll pass it to Anthony.
Anthony Doyle
Thanks Helen. With ORLADEYO net revenue for the quarter coming in at $66 million, that puts trailing 12-month revenue at around $227 million. That’s already over $100 million more than our 2021 full year revenue.
When comparing Q2 ORLADEYO revenue, which came in at $65.2 million to Q3 revenue at $66 million, there are a couple of things that we need to review to align to our comments on steady growth.
For Q2, we had a $2.2 million positive out-of-period reimbursement adjustments. We also had over $1 million of what would ordinarily have been July shipment that patients requested to ship in June due to the 4th of July holiday. For Q3, we also had a $500,000 negative out-of-period reimbursement adjustments.
Factoring in these elements, Q2 revenue would have come in at closer to $62 million, while Q3 revenue would have come in at $67.5 million. That’s around 9% growth quarter-over-quarter.
Even without taking into consideration these adjustments, the compounded quarterly growth rate from the end of last year where Q4 came in at around $46 million to Q3 of 2022 is over 9% growth quarter-over-quarter.
This steady growth, driven by the consistency of new starts and stabilizing DC rates, coupled with continued global expansion, gives us confidence that Q4 will deliver double-digit percentage growth over Q3, and as Charlie said, we are forecasting revenue for full year 2022 at $255 million. That’s more than double our net revenue from last year and positions us well on our path to $1 billion of global peak sales.
You can find our detailed third quarter financial and today’s earnings press release, and I’d like to call your attention to a few items. Total revenue for the quarter was $75.8 million. Outside of the $66 million for ORLADEYO, the remaining revenue came from a $6.9 million RAPIVAB stockpile order and $2.9 million from RAPIVAB API sales to our partners.
Operating expenses not including nonstock cash compensation for the quarter was $83.3 million, and cash at the end of the quarter was at $463 million. That includes the $75 million that we drew from the Athyrium facility in July.
Capital allocation is critical to growing biotechs like ours. And when 9930 enrollment was paused, our team did a great job of controlling both internal and external spend, at the same time, as identifying a hypothesis to potentially remediate the issue, getting agreement from the FDA to list the partial clinical hold and ultimately getting the trial back up and running as quickly as they did.
When we started the year, we guided to ORLADEYO net revenue of no less than $250 million and OpEx of between $440 million and $480 million. Before the enrollment hold for 9930, we were definitely looking at being at the higher end of that OpEx guidance.
We’re now guiding to $255 million in revenue and between $365 million and $370 million of OpEx for full year 2022, which is more than $100 million less in OpEx than the higher end of that initial guidance.
Net cash utilization is therefore significantly lower than we had anticipated coming into the year, which in the current macroeconomic environment is tremendously valuable.
As Helen mentioned, we’re also discontinuing BCX9250, which would have required more than $100 million of investment over the coming years. This disciplined approach to capital allocation and our healthy balance sheet puts us in a strong position to invest in our future growth opportunities.
Now, operator, we’ll be happy to open up to Q&A.
Question-and-Answer Session
Operator
Thank you, sir. We will begin the question-and-answer session. [Operator Instructions] And the first question in the queue comes from Ken Cacciatore with Cowen and Company. Sir, your line is open.
Ken Cacciatore
Thanks so much. Great explanation on Q3. I appreciate that on ORLADEYO. I was just wondering with the investments that you’re making to continue to press the advantage you have with the commercial spend, do you want to give us a little bit of thoughts as we look into 2023? It seems like Q4 is on a nice trend already. Maybe any context you can provide for ORLADEYO and maybe discuss when we should start seeing a little bit more ex US contribution?
And I wanted to give a follow-up now because I know you want to limit to one question. Jon, just in general, as you think about the company, wonderful success commercially with ORLADEYO and on the pathway to $1 billion, but an earlier stage pipeline. We saw Biohaven take the opportunity to really maximize the value of their lead commercial asset with a pipeline that was trailing.
As you, kind of, look at the company and how the value you’ve created in ORLADEYO plus the kind of a little bit of an earlier stage pipeline, albeit we hope 9930 continues to progress, can you just talk about how the company is looking at maybe maximizing the value of these two? Would something like Biohaven’s approach makes sense to your organization? Thanks so much.
Jon Stonehouse
Yes. Charlie, you want to — I’ll take the first one–
Charlie Gayer
You want to start with the last one, and I’ll come back to…
Jon Stonehouse
Yes. So Ken, the strategy, I guess I look at it slightly differently. We have a pivotal program going on with 9930. And our expectation is if we find a safe and effective dose, we’re off to the races with that molecule and competing with an oral drug in an injectable space. So, I don’t see a big gap there. And at the end of the day, it’s steady revenue growth.
So, — if we’re not burning a lot of capital on the R&D side, the revenue catches up. And you saw that this year with Anthony’s guidance, I mean, we’re a little more than what, $100 million apart for the year in terms of revenue and expense. So, if you look at all the other biotech companies around our size, that is a unique position to be in.
We’ll always be open to other options and other creative solutions like Biohaven has done. But right now, we’re building a pipeline and we’re launching a drug that we believe is going to be $1 billion. Charlie?
Charlie Gayer
Ken, so on your other questions around the commercial investments. Yes, I think the first thing to say is, and Jon mentioned this upfront, we still have all confidence in the world that this is a $1 billion peak sales drug. And so as we look to make other investments, it’s really about being as efficient and accelerated in that process as possible.
You’re asking around 2023, I think we’ll give guidance for 2023 in early next year. But we feel good — very good about our trajectory based on the underlying trends. And then as far as ex-US, eventually, at some point, we’ll probably start to break that out. It’s still for 2022 a small percentage of sales. But everything that we see in the underlying trends in Europe and beyond gives us confidence that, that will contribute $200 million plus at peak sales. So, we’re feeling really good about where we are.
Ken Cacciatore
Great. Thanks so much.
Operator
Thank you. Next question in the queue comes from Chris Raymond with Piper Sandler.
Chris Raymond
Hey guys. Thanks. So, a question and also a follow-up. Just on the ORLADEYO quarterly — quarter-to-quarter dynamics. I appreciate the color on the puts and takes from Q2 and also Q3. But can you maybe provide some color on the timing for understanding this dynamic and recognizing that pull forward? I’m just curious because it wasn’t mentioned last quarter and I’m just getting hit by some investors wondering why.
And then maybe as a follow-up, on the next-generation molecule 10013, can you walk us through what you know pre-clinically that gives you confidence that you won’t run into the same sort of signal as 9930?
Jon Stonehouse
Yes. So, maybe I’ll take the first one. Anthony, if I go the wrong direction, you can correct me. But we did point out that there was $2.2 million of non-period accrual adjustment in the second quarter that made that higher than normal.
And then you don’t know the differences between the two until you finish a quarter, right? And so we had some — or finish a month like July. And what happened in retrospect is July 4th landed on a Monday, I believe this year, and a bunch of shipments came in prior to that because I’m sure people weren’t home. And as a result, it got shipped in June instead of July. So, I don’t know if there’s anything else to add to that.
Anthony Doyle
No, just, I mean, will things like this happen? They will, right? I think what we’re not going to do is solely focus on that quarter-to-quarter. But that’s why we lean into the idea of the underlying strength, right? We feel really good around where we are, where we’re going from a growth perspective and that we’re on that path to $1 billion.
So, in the future, will there be some kind of quarter-over-quarter as it relates to holidays or seasonality? Maybe. But I think hitting on that underlying growth factors and how confident it makes us in terms of getting to the $255 million for this year and $1 billion thereafter is our focus.
Jon Stonehouse
Yes. Last thing I’d say on that front is we’re the only ones with the data at the end of the day. No offense to those of you trying to guess. And so we think we’re the most accurate guider and we believe we’re telling you right now that we believe we’ll finish the year at $255 million and that’s a spectacular outcome given that we blew away the first year with $122 million, so more than doubling. Helen, do you want to take the second part of Chris’ question?
Helen Thackray
Yes. So, with BCX10013, we don’t know yet that we will not see that what we’re seeing with 9930. However, we do know a number of things that give us confidence. One is it’s a unique molecule, which means it has its own unique characteristics, and so we expect it to behave differently in the clinic. And we’re seeing that.
Two, as we know what we saw with 9930 — with BCX9930, we’ve learned from that. We’ve applied that in our process with both preclinical and clinical data. And again, what we’re seeing in the clinic with BCX10013 is supportive of proceeding into patient trials and supportive as a potential for once-daily dosing.
Jon Stonehouse
Yes. So some of it, we’ve gathered data that gives us confidence that it could be different. And then there’s some that’s just not mature enough that we can’t declare that it’s that different. We won’t see it. But we wouldn’t be moving it forward if we thought there was a high risk here.
Chris Raymond
Excellent. Thank you guys.
Operator
And the next question in the queue comes from Jessica Fye with JPMorgan.
Daniel Wolle
Good morning guys. Thanks for taking our question. This is Daniel for Jess. A couple of questions. First, I guess you’ve elaborated a little bit on this, but what were the inputs you considered when narrowing down the full sale years’ guidance to the lower end of the prior numbers?
And two, understanding that we’ll see detailed data in early 2023 for 10013, but can you elaborate on some of the early clinical details that have generated with that product, for example, in terms of hemolysis, that was that is a one-state oral therapy.
If I can sneak one more is assuming that — maybe assuming you’re still in a position — assuming you still positioned 100130 similarly to you have been developing for 9930 before — by targeting multiple oral indications, how are you thinking about the potential impact of an IRA and how that might not encourage drug developers to develop more than one orphan indication for the asset? Thanks.
Jon Stonehouse
You’re referring to the Inflation Reduction Act and multiple indications on one molecule?
Daniel Wolle
Yes.
Jon Stonehouse
I’ll come back to that. Helen, you can take the 10013, I’ll take the lower end, and Anthony, again, help me here. So, I mean, it’s real simple, Daniel. We have another quarter’s worth of data and we’re into November now. And so we’ve said we would be the accurate guide, and we believe we’re going to be at $255 million.
So — and this is, I think, one big difference in rare diseases versus mass markets is it doesn’t take a lot of patients to have a movement in one direction or another. So, we’re real confident in the $255 million and that’s a doubling or more than a doubling of the first year great start. Helen, you want to take 10013?
Helen Thackray
Yes, sure. So, in terms of the early clinical data with 10013, this is — just to be clear, this is healthy volunteers. So, we have about 90 healthy volunteers who have been dosed with the drug. And so we have safety data and pharmacokinetic data for those individuals. We have that, including dose levels that may be therapeutic in range. And we do not have data on patients at this point. So, our plan is to move into patients next to assess the potential of complement activity.
Jon Stonehouse
And then on the Inflation Reduction Act, I think there’s a lot of implementation, a lot of unknowns yet that have to occur before we can draw any conclusions and maybe we are different than others, but we’re not going to say we’re not going to bring a molecule forward in a bunch of other indications when patients are in need, and we think that we can create real value for shareholders. So, it’s certainly on our radar, but one of the beauties, I think, in the complement system is single molecules can go after multiple diseases. And so that’s our plan.
Daniel Wolle
Operator
The next question comes from Brian Abrahams with RBC Capital.
Joe Spak
Hi, this is Joe on for Brian. Thanks for taking our question. I just wanted to ask one question on ORLADEYO once again. if you can tell us anything about like any improvement you’re seeing in patient retention rate? And if there are any specific types of patients that tend to stay longer on ORLADEYO. And how is your education or awareness initiatives been impacting this retention rates as of late? Thank you.
Jon Stonehouse
Charlie?
Charlie Gayer
Sure. Yes. So, as I mentioned on the call, first of all, we’ve seen two quarters in a row now of flat patient retention — or patient discontinuations even as our overall patient base has grown. So, I think we’re making a difference.
What we see is the patient types that do absolutely the best are patients who — who are controlled on other prophylactic therapies and then switch over and, in particular, patients who had been on paid therapy where, as I’ve said previously, about 70% of those patients stay on ORLADEYO for at least 12 months. And so that’s what we’re really focused on is getting the right patient type to switch to ORLADEYO.
And then as any patient starts off, we really focus on setting expectations for both efficacy and any side effects that some patients may experience and we see that, that makes a difference. So, we’re pleased with where we are with patient retention, and we think that this is going to be pretty stable going forward.
Jon Stonehouse
And Charlie mentioned this point around the college meeting. And I would just encourage people to watch the presentation and look at the poster because there’s some real-world data in there that’s incredibly encouraging around, as Charlie described, the best switches are the ones that are on controlled on prophy — injectable prophy.
So, our view remains that if you could be controlled on our drug on a once-daily capsule, well, why on earth would you not try it and see if it works for you, right? And so that’s our goal. We’re continuing to chip away at this, and we believe we’re making really good progress on our way to many thousands of patients and peak sales of $1 billion.
Joe Spak
Hey, thanks for the insight.
Operator
And the next question in the queue comes from Jon Wolleben with JMP Securities.
Jon Wolleben
Hey, good morning. Thanks for taking the questions. Two for me. I was hoping you could comment a bit on what you’re seeing on gross net adjustment. As we’re moving forward, you gave some comments on paid patient growth, which is helpful.
And then also, when you talk about the 15 patients from 9930 from which you want to see data to make us go no to decision, just wanted to check, is this strictly PNH patients, or is it the renal patients as well or some combination? How are you thinking about what makes up that go/no-go population? Thanks.
Anthony Doyle
Yes, I’ll take first one. There’s been no major movements in gross net. We talked about in Q1 the impact that we had there, both for Q2, Q3, and Q4 our expectation has been that it would be stable on reimbursed patients. Again, we said around 15% to 20%. Charlie talked previously around what we did from a PBM coverage and insurance or payer coverage perspective at north of 80%.
So, Jon, I don’t think there’s any kind of big drivers. We will continue to see from a percentage numerator versus denominator perspective, including free product that get towards that 15% to 20%, we still feel good about that. But no major movements from Q2.
Jon Stonehouse
And then the 15 patients, Helen, what’s the source?
Helen Thackray
Yes. So, the 15 patients, we’re looking for, first of all, approximately 15 patients. We think that’s the right number for us to be able to have confidence in the data to continue to advance the program.
Secondly, it’s likely to be patients mostly from the REDEEM studies with. That’s a program where we have more sites to global pivotal trials, and we’re likely to see enrollments faster there.
In the RENEW program, we will continue to enroll in program. There’s also a run-in period built in, and so it may take longer for patients to be dosed and proceed to an outcome. So, we assume it’s going to be mostly PNH.
Jon Stonehouse
Yes. Remember, Jon, that they’ve got to have a biopsy to make sure that they truly have disease and the like. So that just takes long.
Jon Wolleben
That’s helpful. Thank you.
Jon Stonehouse
Sure.
Operator
The next question in the queue comes from Gena Wang with Barclays. Your line is open ma’am.
Gena Wang
Thank you for taking my questions. I have a question regarding ORLADEYO launch. So, given your prior comment, just wondering, is retention rate now maintained at the mid-60s? And then my next question is regarding 2022 annual guidance, $255 million.
I just did a quick math that would translate to $74.5 million for 4Q. And if we use like $67.5 million for 3Q, then we have a $7 million growth. And we are only one month into 4Q and also, we have holidays in 4Q. Just wondering what makes you confident you could achieve 4Q numbers?
Jon Stonehouse
Charlie, do you want to take the retention?
Charlie Gayer
Sure. Yes. So Gena, the one-year retention overall, yes, in the mid-60 percentage — and then what we’re really seeing is — and we’ve talked about this before, is where we lose the majority of patients is in the first few months and up to six months. Once patients get out to a year, they’re doing well — and they’re only going to stay on if they’re doing well. And so those patients are much more likely to stay on for the long-term.
Jon Stonehouse
Do you want to take fourth quarter?
Anthony Doyle
Sure. No, I think for Q4, Charlie talked about steady growth. That is, Gena, from an underlying perspective what we’re seeing. And so I think getting to those numbers that you’re talking about, right, to get to the $255 million, given where we are coming into November out of October, I think we feel really good, we feel really confident about hitting that $25 million.
Jon Stonehouse
Yes. And we don’t guide quarterly, but by the fact that we say $255 million, and I’ve given you three quarters worth of revenue, we are basically guiding you in the fourth quarter. Yes.
Anthony Doyle
Yes.
Operator
Thank you. And the next question comes from Justin Kim with Oppenheimer & Company.
Justin Kim
Hi, good morning. Thanks for taking the question. As you think about sort of full speed ahead for the REDEEM studies later next year, could you describe how much separation you see between 9930 and the 10013 program just from a timing perspective? And any sort of progress with 100013 that might just incentivize prioritization of the next-generation inhibitor?
Helen Thackray
Yes. Sure, I can take that. We — so the REDEEM studies, just to be clear, we are going quickly with REDEEM studies. And the question is whether we continue that. So, they are advancing at this is a pivotal program. We expect it to be the first program to read out. We expect it to be the first program to market should we have successfully addressed the dose for a safe and effective drug. So, that — it is the in position to be the first to market.
And we have a second-generation molecule that is also in a position to get to market. It’s early. It’s in Phase 1. We have healthy volunteer data, but we think it has the potential to be best-in-class, and so we’re bringing it through behind.
Jon Stonehouse
Yes, I mean, it’s about two years at the end of the day between the two. One of them is in a pivotal study and one of them is in a Phase 1. And so if we find a safe and effective dose, we’ve got something that creates real value for patients in this market. And so of course, we would invest in it if we have a safe and effective dose.
I think the more important question is, how do we allocate what we go after with each molecule. And our view is probably a skinnier set of indications for 9930, that’s how we see it today. And then because we believe 10013 has the potential to be best, maybe a broader set of indications for that one. But that — we’ll see how the programs unfold over time and give you more clarity on that later.
Justin Kim
Thank you.
Operator
The next question in the queue comes from Tazeen Ahmad from Bank of America. Your line is open.
Tazeen Ahmad
Hi, good morning. Thanks for taking my questions. I think most of them have been answered. For 4Q, now that you have some experience calendar-wise with the launch, do you expect in general any kind of seasonality?
And then secondly, on the subject of pricing, historically, rare drugs have been able to take at least annual price increases. As you talk to insurers, payers, has there been any change in tone on that? Obviously, I’m not asking you to guide, but just in terms of any kind of sentiment shift that you may or may not be seeing from payers?
And then lastly, as you think about 2023 sales for ORLADEYO, where do you think your biggest area of untapped demand lies going forward? Thanks.
Jon Stonehouse
So, who wants to take the seasonality piece?
Charlie Gayer
I can. So, Tazeen, I think looking forward into the new year, I think we’ll see the same kind of seasonality that we saw last year kind of going into Q1 as we talked about, that’s always a time when the majority or a good portion of the patients have to go through prior authorization. So, I think we’ll comment more on that next quarter, but you can anticipate that.
As far as pricing, we don’t — obviously, we don’t comment on general pricing, but payer sensitivity no, I think payers are always sensitive to high-priced therapies for rare diseases like HAE, but we’re not seeing anything notable about that. And there was one other–
Jon Stonehouse
Yes, 2023 untapped potential. Let me start and you can add. I think this further investment that Charlie talked about, we’ll see the bulk of the value of that coming in 2023 for sure. But the message has been consistent quarter after quarter after quarter.
The best patients that we get are ones that are controlled on injectable prophy that switch over to ORLADEYO. And again, I’d encourage you to pay attention to what we’re presenting at the college meeting. So, continuing to pick away and chip away at that, I think, is the key.
Charlie Gayer
And Tazeen, you’ve heard me comment today and many times over the quarters around our top 500 versus Tier 2 and recall for everyone, the top 500 is about half the HAE market, and then there’s Tier 2. And we had 54% of our new prescriptions come from the top 500, so really great balance.
And we see opportunities in both ends, kind of at the top of the market and then expanding the market. And so as we’ve expanded our team a little bit, it’s to take advantage of both of those segments.
Tazeen Ahmad
Thank you.
Operator
And the next question in the queue comes from Rohit Bhasin with Needham & Company.
Rohit Bhasin
Hi, this is Rohit on for Serge. Thanks for taking our questions. Can you just talk about how the recent setbacks with other oral HAE prophylactic products and development changes your long-term outlook for ORLADEYO? And how do you see the competitive landscape playing out? Thanks.
Jon Stonehouse
Yes, I think I said it in my comments. It’s just a reminder of how challenging it is to make a potent specific orally bioavailable drug. I think there are now five companies, including us with AVORALSTAT, that had programs that had to be stopped. So these are really hard.
The flip side of that is it means we may be the only one at the end of the day. And so that puts us in a spectacular position because we know that patients really want an oral. They want a decreased burden of disease and a decreased burden of therapy, and you can offer that with one capsule once a day with ORLADEYO. So, I don’t think it dramatically changes.
The other piece I would say to Tazeen’s question too is we’re — I mean, — we’re absolutely in our competitors that are in the market that are — have prophy drugs are seeing this as well is, the market is definitely moving more and more and more to prophy and away from on-demand. And I think on demand is going to be a tiny, tiny piece of the market ultimately and then we’ll be battling out with injectables for the prophy.
Rohit Bhasin
Okay. Thanks.
Operator
Thank you. And our last question comes from Maury Raycroft with Jefferies.
Maury Raycroft
Hi, good morning and thanks for taking my question. Just wondering if you can elaborate more on the comment about investing more to keep the ORLADEYO momentum going. You mentioned the increase in sales team in addition to field market teams, is that the further investment you’re referring to? And will you continue to add to these teams, or are you at a status quo at this point heading into 2023?
Jon Stonehouse
Surely, it might be good to just talk about one of the keys to the success of the launch so far has been your agility, right, looking at data, understanding what the data is telling you and then making adjustments.
Charlie Gayer
Yes. So, Maury, to Jon’s point, we have always looked where we can do more. And we — when we built the launch when we built the team, we felt and we did have a great team that was ready to compete in this space, and I think we’ve seen that. And what we’re always doing is looking where we can do just a little bit more at the margins.
And so previously, I’ve talked about how we added some additional field-based patient-facing members of the team because that’s a need that we saw. And now we saw an opportunity just to add a little more to our sales team and a market access team. So, we’ll continue to look for these opportunities.
We feel good about where we’re at right now. But at some point in the future, I may come back and say we’ve invested a little bit more because we’ve had other opportunities. That’s the approach we take.
Maury Raycroft
Got it. Makes sense. Thank you.
Operator
We have no further questions in the queue at this time. So, I will now turn the call over to Mr. Stonehouse for closing remarks.
Jon Stonehouse
Thank you, and thanks for your interest in BioCryst. I was recently shown some data from one of the banks around the number of publicly-traded biotech companies. It’s a really, really crowded space. And what was eye-popping was the number of companies that are trading below cash. It’s a really tough time, and you guys know that better than anybody.
But what I think what’s interesting is how do you differentiate yourself when there are so many companies with gene editing, gene therapy, you name it. And I think at BioCryst, the way we see it is we’ve shown you that we have a discovery engine that can do things perhaps that others can’t, right, in making an oral potent-specific once-a-day kallikrein inhibitor. We’ve shown you that we can file in the US, Europe and Japan and get approvals all within four months of each other. That’s even hard for a big company to do.
And we’ve shown you that we can successfully launch a drug, right? I think the initial consensus was $30 million this year. I think it was $218 million. And we’ve consistently beat that, right? And why? Because we look at the data objectively, we develop a plan and then we figure out how to get the business. And so that puts us in a different category, I think, than a lot of other companies.
And then the last point is we have access to capital, whether it’s revenue or other sources of capital, we’re not solely dependent on our shares to bring in additional capital into the market.
So, you add all those things together and then you have a team that I think your job is really hard and do you believe what you hear. And I hope we’re convincing you that we’re trying to be objective in what we see and what we do, that we’re disciplined around how we allocate capital and what decisions we make. It’s hard to make decisions to stop programs. It’s hard to make decisions in this business in general, but we’re not afraid of that.
And hopefully, we’re showing you that we’re trustworthy and that we’re disciplined in how we do it. So, we think we stand out. And we look forward to talking to you more and sharing more with you about how that is and, hopefully, get you more interest in their company. So, have a great day, and thanks for your interest in BioCryst.
Operator
Thank you, ladies and gentlemen. This concludes today’s teleconference. Thank you for participating. You may now disconnect.
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