BioCryst Pharmaceuticals - Q2 2023
August 3, 2023
Transcript
Operator (participant)
Good day, and welcome to the BioCryst Q2 2023 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then 1 on your touch-tone phone. To withdraw your question, please press Star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Mr. John Bluth with BioCryst. Please go ahead.
John Bluth (Chief Communications Officer)
Thank you very much. Good morning, and welcome to BioCryst's Q2 2023 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'll answer your questions. Before we begin, please note that today's conference call will contain forward-looking statements, including those 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. In addition, today's conference call includes non-GAAP pro forma financial measures. For a reconciliation of these non-GAAP measures against the most directly comparable GAAP financial measure, please refer to the earnings press release posted in the Press Releases section of our investor relations website at biocryst.com. I'd now like to turn the call over to Jon Stonehouse.
Jon Stonehouse (CEO)
Thanks, John. The strong step-up in revenue that we expected and achieved in the Q2, and the consistent, steady growth we continue to see in patients on treatment, positions us well to achieve no less than $320 million in ORLADEYO revenue for the year and $1 billion at peak. Charlie will share more of the details, but I want to point out the success Charlie and his commercial team have had in a rare market where there are many treatment options for patients, and yet they're still switching to ORLADEYO. That is great execution by the entire team. Charlie and I also recently attended the U.S. HAEA Patient Summit in Orlando, Florida. This was the first major gathering of U.S. HAE patients since 2019, which was before the approval of ORLADEYO.
A record 1,200 HAE patients and their families were in attendance, and it was an amazing opportunity for us to showcase our company and make connections with this community. Patient activation is a major part of our strategy, and this event was a fantastic launching pad for that. Lastly, we're very excited about the progress we're making with our pipeline. We will host an R&D day on November 3 at our labs in Birmingham, Alabama. We plan to show you much more about additional assets and programs we haven't discussed previously.
Our hope is you will see more clearly how our structure-based drug design platform, focused on pursuing first-in-class or best-in-class medicines for patients with rare disease, allows us to spread the inherent risk of drug discovery across multiple programs, targets, and diseases, and increases our probability to get at least one of them to the market to follow the success of ORLADEYO. We look forward to sharing more with you in November. Now I'll hand it over to Charlie.
Charlie Gayer (Chief Commercial Officer)
Thanks, Jon. Q2 results for ORLADEYO rolled out as we expected. Revenue jumped following the Q1 prescription reauthorization process. I'll provide more color on both. Growth in patients treated with ORLADEYO continued at the same consistent pace we've seen over the past two years. After a strong Q1 in the United States for net patients added to therapy, we added about the same number of patients again in the Q2. I noted at the last earnings call that we had crossed 1,000 patients on therapy in the U.S. As you would expect, we are above that total now. This is what linear growth looks like. We also made great progress in getting patients to paid therapy, adding the most net paid patients in a quarter since Q2 of last year.
In fact, we added the exact same number of net paid patients as a year ago. We also had a very similar number of discontinuations as in the Q2 last year, even though our current patient base is significantly larger. The discontinuation rate continues to go down. Again, linear growth. As we forecasted, revenue took a substantial jump in Q2 over Q1, just like it did a year ago. The biggest driver was the continued growth in our patient base, but we are also improving our ability to get patients to paid therapy. In January and February, for example, roughly 34% of patients were on free product during the heavy reauthorization period. That fell to about 32% by the end of March. By the end of Q2, the percentage of patients on free product fell to 30%.
We made a lot more progress after reauthorizations were completed. Every percentage point of our current patient base that we move to paid therapy is worth about $4 million in annual revenue. These improvements are very meaningful. Based on the trends we see and the work our team is doing, we expect to see continued steady improvements in that percentage over the next few years. We're confident we will reach our long-term goal of getting over 80% of U.S. patients on ORLADEYO to paid status. The bottom line in the U.S. is this: We are growing total patients on therapy at a very consistent rate every quarter, just as we have done since launch, and we are getting even better at moving patients to paid therapy.
For the rest of 2023, we expect revenue to track along with steady patient growth to reach no less than $320 million in global revenue for the year. In future years, you can expect the same pattern based on patient growth trends and insurance seasonality. Q1 revenue being slightly down based on reauthorizations, Q2 being a larger bump in revenue, and steady growth in Q3 and Q4. The U.S. currently accounts for about 90% of global sales, but this may overshadow how well we are doing in Europe and the rest of the world. What we are seeing right now in Europe is very similar to the U.S.: steady quarterly growth in patients on therapy.
We are laying the groundwork for similar patient growth trajectories as we launch in more and more countries around the world, on the way to 20% of peak global sales coming from markets beyond the U.S. As John said earlier, we recently attended the US HAE Summit in Orlando, along with 1,200 patients and their family members. Their interest and enthusiasm showed us how much demand there is for an oral, once-daily prophylaxis therapy. We are seeing the same thing around the world. Our teams and our partners in North America, Europe, Latin America, and the Middle East are doing phenomenal work to bring ORLADEYO to patients who need it. We keep growing, we keep improving. I'm so proud of our global teams and how they're bringing this transformative therapy to patients living with HAE all over the world. Helen, I'll turn it over to you.
Helen Thackray (Chief Research and Development Officer)
Thanks, Charlie. It was exciting to hear from so many patients at the HAE Summit about how ORLADEYO has controlled their attacks and changed their lives. HAE is a hereditary disease passed down from parents to children, and we spoke with many parents who wanted to know what progress we are making towards bringing ORLADEYO to the pediatric population. The burden of HAE, and in particular, the burden of injectable therapy, is especially difficult for children. That is why we're focused on a future pediatric indication with oral once-daily ORLADEYO in the APeX-P trial, including evaluation of a new formulation using granules to best meet the needs of children with HAE. APeX-P is up and running at multiple sites, and I'm pleased to note that enrollment is proceeding as expected.
Turning now to the pipeline, we're looking forward to our R&D Day in November, where we'll share with you details on new programs and molecules that you haven't seen before. Our goal with our pipeline is to bring first-in-class or best-in-class molecules to patients with rare diseases and to have a second product, and more following that, which we bring to market as we did with ORLADEYO. As we focus our investments across multiple molecules, targets, and rare diseases that meet our criteria, we are diversifying risk by adding to our options in discovery and early development. Adding these options increases our overall chances for success in achieving that goal of bringing additional products through registration and to patients. As you, as you've seen, we are also disciplined about decisions to invest in later-stage products, which are proportionately more expensive.
We won't accelerate R&D spending for a pivotal program until we have clear data that we are likely to have a first-in-class or best-in-class molecule. This is our approach with BCX10013. We want to see data that shows BCX10013 is an oral Factor D inhibitor with once-daily dosing, excellent safety, and efficacy that is as good or better than the other options for patients. If the data show BCX10013 has this profile, this is the profile of a best-in-class molecule, and we will invest to run pivotal trials and bring it to market. If the data show we don't have a best-in-class molecule here, we'll stop development. It is early, and there's still plenty of unknowns with the BCX10013 program. We do have two updates to share with you today. We have restarted dosing in our multiple ascending dose trial in healthy volunteers to add another dose level.
We have previously evaluated multiple doses up to 80 milligrams and also single doses of up to 110 milligrams, where we saw excellent durable control of the alternative pathway at 24 hours post-dose. These data support proceeding with evaluation in patients. We'll take our healthy volunteer dosing higher to refine our model, our PK model data set, with daily dosing at 160 milligrams for 14 days. This is in parallel to the work we'll do in patients to obtain more robust information for our PK model and eventually inform final pivotal dose selection. We're now also proceeding with our dose-ranging trial, BCX10013, in patients. We expect to begin enrolling patients by the end of the year, with initial data available next year.
We are conducting this trial in patients, and we have chosen to work in PNH for evaluation of both alternative pathway activity and clinical outcomes to determine if we have a safe, effective, once-daily dose that meets our criteria to move forward into a pivotal program in renal complement-mediated diseases like IgAN.
Tazeen Ahmad (Managing Director)
Before BCX100 or beyond BCX10013, we continued to build and advance our early pipeline as we invest in discovery for new targets. We're now ready to share our exciting progress with a growing pipeline of molecules, we look forward to doing this at our R&D Day in November at the BioCryst Discovery Center of Excellence in Birmingham, Alabama. Now I'll turn the call over to Anthony.
Anthony Doyle (CFO)
Thanks, Helen. With global ORLADEYO revenue for Q2 coming in at $81 million, we saw the step-up that we anticipated from Q1. Based on this strong Q2 revenue performance and continuing underlying patient growth, similar to last year's quarterly cadence, we anticipate that revenues will increase slightly in the third and then again in the Q4. Year-to-date, ORLADEYO revenue is at over $149 million. We expect revenue in the second half to come in at approximately $171 million, or an average of $85.5 over the next two quarters. We're confident that we will achieve our revenue guidance of no less than $320 million for the year. You can find our detailed Q2 financials in today's earnings press release, and I'd like to call your attention to a few items.
Total revenue for the quarter came in at $82.5 million, $81 million of which came from ORLADEYO. Of that $81 million of global ORLADEYO revenue, $72.8 million came from U.S. sales, with the remaining $8.2 million coming from ex-U.S., increases of 24% and 26% over Q2 of 2022, respectively. Operating expenses, not including non-cash stock compensation for the quarter, were $90.4 million, flat to Q2 of 2022.
R&D investment for the first half of 2023 reduced significantly compared to the same period in 2022, and we expect that trend to continue and that R&D investment in the second half of 2023 will be lower than in the second half of 2022, even as we factor in the additional trials for BCX10013 that Helen discussed and continued investment in our pipeline that we will share more about at the R&D Day in November. We reiterate our full-year OpEx guidance at $375 million for the year, flat to prior year. Cash at the end of the Q2 was at $415.7 million. That includes net proceeds of $26 million from the Pharmakon refinancing that we closed in April, a deal that moved our debt repayment, repayment date out into 2028, gave us greater access to capital and improved our terms.
Net operating cash utilization for the quarter improved from $28 million in Q2 of 2022 to approximately $13 million last quarter, primarily driven by our increased revenues. GAAP earnings per share for the quarter were -$0.40. That includes the impact of an approximately $29 million debt extinguishment charge following the refi with Pharmakon. Adjusting this one-time charge out on a pro forma basis, earnings per share came in at approximately -$0.24 for the quarter.
With the continuing strong performance of ORLADEYO as we move towards our 2023 goal of no less than $320 million and onwards to peak sales of, of $1 billion, OpEx flat to prior year, while continuing to invest in advancing our pipeline, all combined with our strong capital position, we're in great financial shape to generate value as we move the company forward. Now I'll pass it back to Jon.
Jon Stonehouse (CEO)
Thanks, Anthony. We had a great quarter, whether it's the ORLADEYO performance or the advancing of the pipeline. That is a direct result of great execution, so I want to thank the BioCryst employees for that. We plan to report Q3 earnings on November second from Birmingham, the day before our R&D Day. We are very excited to host some of you at our labs in Birmingham, Alabama. We've got limited space, so the rest of you will be able to participate via webcast. Some of you may, may be asking, why are we holding this on a Friday afternoon in Alabama? There's two main reasons. One, we found that when you're there and have hands-on, seeing what we do and how we do it and meeting our scientists, you have a better appreciation for what we're capable of doing.
The second reason is Saturday, the next day after, for those of you who are college football fans or not, there's a pretty important game down the road in Tuscaloosa, where LSU is coming to play Alabama. We look forward to hosting our R&D Day on November 3 in Birmingham, Alabama. That's it for our prepared remarks. We're now going to open it up for your questions.
Operator (participant)
Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star then 1 on your touch tone. If you are using speakerphone, please pick up your handset before pressing the star keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then 2. Our first question comes from Tazeen Ahmad with Bank of America. Please go ahead.
Tazeen Ahmad (Managing Director)
Hi, guys, good morning, and I'll start looking for flights to Alabama. I wanted to maybe get a little bit of color on how you're thinking about the second half of the year for ORLADEYO trends. Now, you were specific about saying that you expect to see some growth in the third and Q4. I think people would be interested in knowing how your growth, which is very strong, could, could, turn into outsized growth in, in coming years. And where do you see your areas of, of, you know, real unmet need now that you're, you know, fairly, mature into this launch? What are your focus areas for your marketing team, for example, and where do you think most of the upside is going to be coming from? Thanks.
Charlie Gayer (Chief Commercial Officer)
Sure. Tazeen, yeah, I can, I can take that. First of all, the question about the second half of this year. We expect the revenue to go up at the pace of the additions of patients on therapy. As I've talked about, we've had really consistent growth in patients on therapy. That's what's gonna drive the growth in Q3 and Q4, just as it's done since launch. As far as your question about the unmet need, the opportunity, what we know is that all things being equal, the great majority of HAE patients would rather treat their disease with one pill once a day.
The unmet need is to get all the people who haven't tried yet to try ORLADEYO, and a lot of those are patients who are taking other prophylaxis therapies, injectable prophylaxis. We're gonna keep focusing as a number one priority on giving them the chance to switch over and try ORLADEYO and seeing how much more they can benefit by treating their disease with an oral drug.
Jon Stonehouse (CEO)
Charlie, I'd add, you know, when we were at the patient summit in Orlando, one of the things that we had a challenge with at the launch was, patient activation because of COVID. What we heard from patients is, you know, this is the first time they were aware that it was approved and available to them. I think the more that we get going, Tazeen, I think that's potential for continued growth. The bottom line is, there's a lot of good drugs out there that people are controlled on, and so it's tackling it, you know, doctor by doctor, patient by patient, to get them to wanna try it, because the, if it works for them, it's, it's way better than being injecting yourself.
Tazeen Ahmad (Managing Director)
Okay, Jon, thanks for that. You know, you, you have reiterated your confidence in reaching $1 billion in peak. Do you have a sense of how long it would take from where you are now to reach that goal?
Charlie Gayer (Chief Commercial Officer)
I think what we've said before, we'll say again on this, Tazeen, is you can draw a line between, you know, our year one revenue of about $122 million, $250 million last year, and $320 million this year, that'll give you a pretty good sense of when we expect to get to $1 billion. It'll take some more years based on what John was just talking about. It's, you know, moving this market takes a while, but everything we see in our forward-looking market research, as well as our, the results that we're putting on, on the board, gives us great confidence that we're gonna get there.
Jon Stonehouse (CEO)
Yeah, that line crosses $1 billion around the turn of the decade. Remember, we have patent protection out to 2039, so we've got almost another 10 years of protection at peak. That's real value.
Tazeen Ahmad (Managing Director)
Thank you.
Charlie Gayer (Chief Commercial Officer)
You're welcome.
Operator (participant)
Our next question comes from Chris Raymond with Piper Sandler. Please go ahead.
Nicole Gabreski (VP of Equity Research)
Good morning. This is Nicole Gabreski on for Chris. Thanks for taking the question. Maybe just around the 10013 program. I know you guys are going to evaluate a higher dose in healthy volunteers. I guess just any color around maybe how that translates to the dose in preclinical models where you observe the chronic tox signal. Just to clarify, I guess, have the chronic tox experiments been completed at this point?
Helen Thackray (Chief Research and Development Officer)
Yeah, good morning. I'm gonna take those in reverse order. In terms of the chronic tox, we had a chronic tox program. It's still ongoing, we don't expect that to complete until later in the year. In terms of the information and translating that to effect, what we know is from healthy volunteers, where we see that the clinical, the complement pathway, is inhibited to greater than 97% at 110 milligrams, and we need to go into patients, and we'll do that with our patient trial in PNH to assess further information around complement inhibition at that and dose escalating, as well as then how that translates into clinical outcomes so that we can confirm the dose.
Jon Stonehouse (CEO)
I think at the end of the day, Nicole, it's all about what do we see in humans, and do we have a safe and effective dose that's once a day? That's the whole point behind that trial.
Nicole Gabreski (VP of Equity Research)
Yep, got it. Then just, really quick, I know last quarter there were some unanticipated headwinds with the lack of funding from some of the external charities, helping to provide co-pay for patients on ORLADEYO. I guess, where does that situation stand currently?
Charlie Gayer (Chief Commercial Officer)
The, the, the situation has stabilized, so we are not losing more patients or having patients having to drop back to free product since the Q1. Those that we did put on long-term free product in the Q1 have to stay on it for the rest of this year. But, but for now, the situation is, is, is, is stabilized.
Jon Stonehouse (CEO)
Yeah, I'd just make one big plug for Charlie and his team. Despite that, they're making great traction or having great traction in converting patients from free product to, to paid. As he said, it was at 34%, and now it's down to 30. My expectation, I think Charlie's as well, is that that's gonna continue to go down.
Nicole Gabreski (VP of Equity Research)
Great. Thanks for the color.
Operator (participant)
Our next question comes from Stacy Ku with TD Cowen. Please go ahead.
Stacy Ku (Biotechnology Equity Research Analyst)
Thanks so much for taking our questions. We have a few follow-ups. First, regarding 10013, that additional cohort, was this a request from the FDA or just the next natural step in your development for this program? Regarding the potential range of doses for the global PNH study. Willing to provide some details there? I know you've discussed data next year, but is there potential to get a sense of the safety profile any earlier? Those are our questions on kind of the pipeline.
Regarding ORLADEYO, I know you've, in the past, not discussed exactly the size of the sales force, but now that you've increased it in Q4, could you just talk about the relative sizing versus other competitors like Takeda, as you think about expanding potential efforts and maybe community settings and clinicians that really only treat two to three patients? Thanks so much.
Jon Stonehouse (CEO)
Helen, do you want to take the BCX10013, and Charlie, you can take the sales force one.
Helen Thackray (Chief Research and Development Officer)
Yeah. 10013. The dose that we're adding with the healthy volunteer trial, the 160 milligrams, that is for our own purposes. That is so that we can assess mostly PK from that dose level and build it into our PK model. We'll need that once we have our patient data in order to confirm the final dose for pivotal trial initiation. That's, that's why we're adding that dose level. In terms of the range of doses then that we're looking in the PNH trial, we'll be starting at 80 milligrams and dosing up from there. What we're looking for is complement activity. We're looking for that to be, we're looking at that for multiple doses and in the disease state.
We're also looking then for clinical outcomes, and we're trying to assess then for safety, but more importantly, for efficacy, and that in the, in the PNH, in the population setting, will be in clinical outcomes, like looking at hemoglobin and LDH.
Jon Stonehouse (CEO)
Helen, it might be good to just talk about roughly how many patients do you think we need for that study to get a sense of that? How long do we need to follow those patients to get a sense of the safety, at least in the short, you know, this initial study?
Helen Thackray (Chief Research and Development Officer)
Yeah. That's, that's a small study, and we don't need many patients, and that's 1 of the reasons to assess complement inhibitor in patients with PNH. You can dose escalate, and we will be doing that within individual patients, and each 1 will be giving us information on then, how that patient's complement system is affected and their own clinical outcomes, and dose escalating with that information. Not very many patients, small trial. In terms of the safety information, we'll be looking at that as we dose up as well. We'll have, again, in individual patients, the ability to observe safety across a range of doses.
Jon Stonehouse (CEO)
Three months, six months, 10-15 patients, roughly?
Helen Thackray (Chief Research and Development Officer)
Yeah, it's pretty small, it's, it's, you know, 4 to, 4 to 12 weeks to have a first-
Jon Stonehouse (CEO)
Yes
Helen Thackray (Chief Research and Development Officer)
outcome.
Jon Stonehouse (CEO)
Great.
Charlie Gayer (Chief Commercial Officer)
Then on the, the, the sizing of the sales force, what I've said before is that our, our team's between, kind of right in the midpoint between 30 and 50 people. I've never said the exact number. But, at the beginning of the year, we did add a few sales territories. The biggest thing, though, that we did is double the number of our regions, so that it gave our regional managers or regional directors more time to spend with their teams and with key customers. When we build our sales force, the number one thing we look at is the market potential in terms of HAE prescribers out there. So we, we build it on a, on a workload basis for each, each, sales rep, so they, they can be efficient.
We also do look at what best we can tell, what the competition's doing, and we, we think that our team is sized very comparably to them.
Jon Stonehouse (CEO)
Charlie, it's not just the rep, right? What we hear from docs is that they see somebody from BioCryst, you know, every week. So you might want to just talk about-
Charlie Gayer (Chief Commercial Officer)
Yeah
Jon Stonehouse (CEO)
the whole team that--
Charlie Gayer (Chief Commercial Officer)
Simultaneously, what we do is, you know, we have, we have a market access team out in the field, so we've, we've built up that team. We've expanded our patient services team so that they work closely with patients, but also with, with the practices. Then, of course, on our medical side, we've got, you know, a very excellent medical team out there working to educate physicians. We look at the whole, the whole package, and as we do our market research, yes, we get feedback that they're seeing BioCryst people the most frequently.
Stacy Ku (Biotechnology Equity Research Analyst)
Okay, very helpful. Thank you.
Charlie Gayer (Chief Commercial Officer)
You're welcome.
Operator (participant)
Our next question comes from Brian Abrahams with RBC. Please go ahead.
Nevin Varghese (Senior Equity Research Associate)
Hi, everyone. This is Nevin on for Brian. Congrats again, on a good quarter. I had a couple questions about how the efforts that you guys are taking to convert free drug patients to paid drug. Can you talk about some of the efforts there in regards to patient education and simplification of some of the paperwork that's been mentioned on previous calls? Then also, if you could speak to some of the gross-to-net trends in the quarter and some of the recovery into future future quarters as well.
Charlie Gayer (Chief Commercial Officer)
Sure. Yeah. On the conversion from free drug to paid drug, the place where we've made the most progress is within the commercially insured market, which is the largest portion of our business, a little over 60%. The number 1 thing, as you're alluding to, is making sure that we are working with customers to get all the complete paperwork. What that means is, for a new prescription coming in, that the start form is complete. We've got the lab tests, we've got the clinical background and justification. If we get that all complete upfront, the insurer is much more likely to approve the claim.
Likewise, anyone who has been on free drug, going back and doing a really comprehensive appeal, letter of medical necessity, putting in the whole patient and family history, is critical to the, the, the insurers changing their mind. As our team is more and more focused on this and helping educate, healthcare providers in particular, we're seeing more and more success in getting people moved over to paid product. On the gross-to-net, gross-to-net, that's a part of what happens in the Q1, where your revenue goes down a bit.
One of those factors is that we take it in on our commercial side with our co-payment assistance program, the biggest hit happens in Q1, where many patients get up to the point of their out-of-pocket maximums are exhausted, and then that normalizes in Q2 and for the rest of the year. Gross to net was, was as bad as it's ever gonna be in, in Q1, and then it normalizes for the rest of the quarters.
Anthony Doyle (CFO)
Yeah, to friend that up, what we said in Q1 is that it was at the higher end of that 15%-20% range. We had expected that in Q2, it would come into the lower end of that range and then maintain that throughout the year. That's exactly what we saw happen.
Nevin Varghese (Senior Equity Research Associate)
Okay, thank you. Then if I could also ask about the retention rate of patients who are on the drug. You had mentioned that the same number of patients who dropped off, despite the higher, I guess, the higher denominator there. So what do -- are those retention rates. In regards to the retention rates, are they kind of the same in the US and ex-US, or are you seeing any differences in what those rates look like in those geographies?
Charlie Gayer (Chief Commercial Officer)
Yeah, great question. What we're seeing at this point, and we've got a lot of history now that gives us confidence in saying this, is that the pattern of discontinuation is very consistent. When a patient starts in the U.S., a patient starts on therapy, about 60% of them make it to 1 year, and then we lose very few people after a year. What that means in, in the U.S. market is every month, as we're getting a consistent number of patients coming onto product, we, we can predict how many people are gonna drop off, and our base is growing. The absolute discontinuation rate as a proportion of our base, keeps going down. Ex-U.S., we're seeing the same pattern of when people discontinue, but actually the overall retention rate has been better.
We think a lot of that has to do with just the, in Europe, you tend to have larger HAE treatment centers, where the healthcare providers are very focused on their patients and may be just generally providing better education. Overall, the key to retention is, and we're very focused on this, is setting expectations with patients so that they know what to ex-expect in those first few months of therapy, and if they hit any bumps, then they don't panic and drop off therapy. We've seen that, that has been very effective, and I think that's why we've got this stable pattern that we're seeing now.
Nevin Varghese (Senior Equity Research Associate)
Okay, thank you all.
Operator (participant)
Our next question comes from Jon Wolleben with JMP Securities. Please go ahead.
Jon Wolleben (Managing Director and Equity Research Analyst)
Hey, good morning. Thanks for taking the questions. On the free drug dynamic, Charlie, you mentioned the goal to get to at least 20% or less on free drug. Wondering when you think that could happen, with the guidance for the second half of the year, with steady revenues between Q3, Q4, should we expect any movement on the free drug status in the back half of the year? If you're seeing steady patient adds and, and steady revenue, it seems like that should be stable, but wondering if you could talk a little bit about those two, those two points.
Charlie Gayer (Chief Commercial Officer)
Sure. Kind of the, the, the second question. We expect to make just continued incremental progress in the second half of the year, getting people to paid drug. It'll contribute, but I think the patient growth is really what's gonna drive our sales growth the second half of the year. As far as when do we expect to get to the, the 20% or better, it's gonna take a few years to get there, but the early, you know, as we're really focused on this, what we're seeing in the last few months is new patients starting on therapy are already getting to an 80% plus paid rate. That gives us that confidence that over time, we're gonna be able to get everyone there.
I think it's the, the team focus, you know, our patient services team, our market access team, our sales team, working to educate patients and healthcare providers about this and, and to continually work with payers. That, that's- all of that together is what's, what's making the difference.
Speaker 14
Got it. Ex-US, you mentioned things are going well. Wondering if we should expect to see an acceleration at any point, if there's a tipping point, or is this gonna be, you know, a grind higher as well there? You know, maybe a little bit about if it's gonna be certain countries contributing the most, or is this gonna be, you know, consistent geographic expansion, driving the revenue ex-US?
Charlie Gayer (Chief Commercial Officer)
Yeah. I, I wouldn't expect a tipping point or acceleration. We're really seeing the same pattern of patient growth. You know, as we've talked about, it takes a good 4 patients, ex-US, to add up to 1 US patient just from a revenue perspective. We will keep so the steady patient growth is the number 1 thing. We'll keep adding countries, so we expect next year to launch in our wave two of Europe, so countries like Italy and Spain and Benelux. We'll have those those continued additions to our revenue stream, but I wouldn't expect a big, you know, inflection point. Steady growth.
Jon Wolleben (Managing Director and Equity Research Analyst)
Thanks, Charlie. Appreciate the call.
Operator (participant)
Our next question comes from Justin Kim with Oppenheimer & Co. Please go ahead.
Justin Kim (Executive Director of Biotech Equity Research)
Hi, good morning. Thanks for taking our question. You know, maybe just a quick one first, and then a commercial. As you think about the additional data being accrued for PNH, can you just discuss how those results may inform IgAN and whether you think the clinical bar might be lower in terms of the alternative pathway inhibition required, perhaps due to the nature of the disease or competitive bar there? Maybe on the commercial front for Charlie, could you just update us on the mix of growth you're observing, whether those patients being added are naive to prophylaxis or experienced, as, as well as coming from high prescribers versus low volume prescribers? Thanks.
Helen Thackray (Chief Research and Development Officer)
Sure. On the PNH question, what we need to understand next is the dose that gets us to efficacy. We're looking for a safe dose that is effective, and that's measured by both the effect on the complement pathway and then the clinical outcomes. We're looking at that in PNH because that is an excellent opportunity to understand fairly quickly with a small number of patients, whether we're getting to rigorous complement inhibition and the clinical outcomes that translate. We know what we need to see to demonstrate a dose that is achieving both.
We would expect that dose then to translate to other diseases, and we're treating the PNH opportunity as one that we would assign, we would sort of achieve and understand the pivotal dose, and then take that into IgAN and other diseases. We are, as a reminder, we're looking for a differentiated drug to take forward. We're looking for safety and efficacy that's as good or better from what we're seeing in the field with complement inhibition, and we're looking at that with once-daily dosing.
Jon Stonehouse (CEO)
That's what others have done in the field with alternative pathway inhibitors, so this isn't new ground.
Charlie Gayer (Chief Commercial Officer)
On the patient and prescriber mix, Justin, again, the story is consistent patterns. Still about 50% of the patients are coming from other prophylaxis products, and the other 50%, at least best we can tell, were not recently on a prophylaxis product or were completely prophy-naive. It's great to see that consistency. On the prescriber mix, we get a little more than half of our prescriptions from those top 500 doctors that I've talked about, the ones who treat about 50% of the market, and then we get a little less than half from the larger group of other physicians. What's great is that every quarter, we're seeing a very consistent number of new ORLADEYO prescribers being added. We continue to go broader into the prescriber market and then deeper within existing prescribers.
Justin Kim (Executive Director of Biotech Equity Research)
Okay, great. Thanks so much.
Operator (participant)
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star then 1. Our next question comes from Serge Belanger with Needham and Co. Please go ahead.
Serge Belanger (Managing Director and Senior Medical Technology and Life Science Tools Analyst)
Hi, good morning. Just a lot of questions have been asked at this point, so, maybe a couple around the HAEA summit that was held recently. Maybe just talk about the, the level of, awareness of ORLADEYO within, the patients that you met there, and whether you've seen, you've experienced any tailwinds from attending the meeting, maybe some, additional, enrollment in the QuickStart program?
Charlie Gayer (Chief Commercial Officer)
Yeah. Serge, as, as Jon said earlier, we did, you know, first of all, we had a, we had a, a big presence there. This was our first time attending, since we've launched ORLADEYO. We had a booth there. We actually had two booths, both a branded and an unbranded booth. A lot of patient traffic coming through our booth, a lot of great conversations. You know, it's, it's always a little frustrating, but when a patient says, "Oh, is this drug launched?" We did hear that, it's great. Now they know ORLADEYO is on the market. You know, as we said, 1,200 patients and family members, they all left knowing that ORLADEYO is on the market.
What we're telling our healthcare providers out there is that this, this conference just happened, and they may be getting patients coming in and asking different questions about their therapy and that ORLADEYO is, is, that they, they may have questions about ORLADEYO. We'll see if we get a tailwind, but, it, it was definitely an important milestone, and, it was just, it was great to see the community again and, just to see their excitement of, of just them getting together again. It was, it was a really great meeting.
Jon Stonehouse (CEO)
I think, I think, too, it's, it's like the first of what I hope will be a bunch of patient meetings regionally. All that stuff stopped with COVID, and, you know, so a certain state, a certain part of the country, they gather. I think the other thing is people reconnected. It's, it's like watching a family reunion, honestly, and, and the word-of-mouth spread, you know, 'cause we got an equal number of people that came up to us and it's like, "Oh, my God, ORLADEYO has changed my life, and let me explain to you why." So when they're talking to other patients about that, I, I think that's gonna be helpful, too.
The last piece was, you know, the KOLs are there as well, it's a just a different dynamic at a patient meeting than when you go to the college meeting or ACAAI. You know, we're able to show up in a way that differentiates us maybe from our competition. I think it's a chance to really reinforce and connect with the KOLs in a way that maybe is harder in other settings. It was fantastic.
Operator (participant)
Our next question comes from Deepak Mathivanan with Barclays. Please go ahead.
Speaker 14
Sorry, I think this is Tony on for Gena Wang. Another quick question on kind of on BCX10013. What, what initial data would warrant, you know, potentially further development, and what could we maybe expect to see at R&D Day on this or even just other new pipeline assets?
Helen Thackray (Chief Research and Development Officer)
Yeah. Okay, so with BCX10013, what we are looking for something that's really quite straightforward, and I think we'll be quite clear. We're looking for data to show that we're seeing the activity levels we need to see and the clinical outcomes that we're looking for in patients. We're looking for that in a manner that's also safe. It's, it's, you know, fairly simple. We're looking for safety and efficacy that's as good or better than what is available to patients, and we're looking for that then with once-daily dosing. Once we see that, and have selected the dose for program, that's the point at which we would be making the decision to further invest and initiate pivotal trials. In terms of R&D Day, we'll update across the pipeline.
There we have a number of things that we've been working on, and I'm, I'm really excited and pleased with what's been happening in the discovery and early programs in Birmingham and within the company. It's, it's sort of breadth and depth of the pipeline that we'll be discussing there.
Charlie Gayer (Chief Commercial Officer)
Yeah. I doubt there'll be any new information on BCX10013. At that point, this will be stuff you've not heard of before.
Speaker 14
Okay, got it. Very helpful. I guess another quick one on ORLADEYO launch. I know there's been a lot of questions already. Is there anything that could lead to sales kind of exceeding guidance for 320, either in terms of the retention rate or new patients or patients switching?
Charlie Gayer (Chief Commercial Officer)
We're, we're really confident in the, in the 320 number, and, and, you know, based on what we're seeing, I think that's, that's what you should expect for the, for this year. Consistent patient growth, incremental progress on getting patients over to paid therapy, and that, that same pattern that I described earlier about patient retention to get us to 3. The continued growth outside of the U.S. That's what'll get us to the 320.
Speaker 14
Got it. Thank you. Very helpful.
Operator (participant)
Our final question comes from Maury Raycroft with Jefferies. Please go ahead.
Yawang Ji (Equity Research Associate)
Hi, good morning. This is Yawang for Maury. Thanks for taking our questions. Congrats on a good quarter. I guess our 1st question is on the Q2 revenue growth. You're saying for the rest of the year, the revenue growth is going to be more steady. From last year, we saw there was a bit of confounding factor from the 4th of July holiday ordering that affected the relative growth rate of Q3 and Q4. How should we think about the effect this year?
Charlie Gayer (Chief Commercial Officer)
Yeah. Q3 and Q4 will not be as big a jump in revenue as Q2, 'cause Q2 was driven by the patient growth, but also the, you know, all the factors coming out of the Q1 reauthorization process. You know, as Anthony described in his comments, we should average about $85.5 for the. A little bit less than that in Q3, a little bit more in Q4 to get to the $320. For the July 4th, yeah, July 4th was on a Tuesday this year, there was a day or two of shipments that came into June, that was part of our expectation this year. We saw that happen last year, we built that into our plan.
You know, just as a reminder for everyone, in the U.S., we have a sole source specialty pharmacy, so, you know, this is all based on individual patient demand, and there are a lot of those patients going away for the 4th of July holiday. Around times like that, you will see a little bit of a pull forward, but it's usually just a day or two of shipments.
Yawang Ji (Equity Research Associate)
I see. Maybe just a quick one on C1 normal patients. We saw some data on ORLADEYO successfully managing C1 normal patients earlier this year in EAACI. I'm just wondering if you're sharing any insights into how you're seeing in real world, how patients with C1 normal profile, like, how many of them are on the therapy, if you see anything about retention rate and et cetera? Thanks.
Charlie Gayer (Chief Commercial Officer)
Yeah, we haven't shared the number other than what you saw in the EAACI poster, you know, in terms of the proportion of our business. We do get C1 normal patients. I think, you know, all the prophylaxis products are seeing C1 normal patients. These are patients who have really struggled for a number of years. It's been, you know, their diagnosis isn't as clear-cut as type one and type two, so they've, they've, they've looked for therapies that work. What we're seeing for a lot of them is that ORLADEYO is, is really helping them. So we're seeing consistent reduction in attack rates in patient-reported attack rates. Then from a retention perspective, we're seeing just about as good retention with C1 normal patients as we are with type one and type two patients.
We, you know, you can expect more data from us on this in, in the future, but right now what we're seeing is, We're, we're very pleased and just glad that we can we can help these patients.
Yawang Ji (Equity Research Associate)
Got it. Thanks so much. Congrats again.
Charlie Gayer (Chief Commercial Officer)
Thank you.
Operator (participant)
This concludes our question and answer session, and with that, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.