BioCryst Pharmaceuticals (BCRX) Q1 2021 Earnings Call Transcript

BioCryst Pharmaceuticals (BCRX -1.00%)
Q1 2021 Earnings Call
May 06, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BioCryst's first-quarter 2021 earnings call. [Operator instructions] I would now like to hand the conference over to your speaker today, Mr. John Bluth of BioCryst. John, the floor is yours.

John Bluth -- Senior Vice President, Investor Relations and Corporate Communications

Thanks, Jay. Good morning and welcome to BioCryst's first-quarter 2021 corporate update and financial results conference call. Today's press release is available on our website. Participating with me today are CEO, Jon Stonehouse; CFO, Anthony Doyle; and chief commercial officer, Charlie Gayer; chief medical officer, Dr.

Bill Sheridan; chief business officer, Megan Sniecinski; 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 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 -- Chief Executive Officer

Thanks, John. I couldn't be more excited to have our first earnings call with revenue from a BioCryst launch product. This is the latest evidence that our company is going through a major transformation. Sales were very encouraging in Q1 especially considering this is our first quarter of the launch of Orladeyo.

This is a direct result of focused execution of our plan by the BioCryst team, and the desire to build a great company that can discover, develop and now successfully commercialize oral medicines for patients suffering from rare diseases, very few companies can do all three. The launch is off to a great start because we have a great drug. It works. Patients are experiencing meaningful reductions in their attacks, and they can achieve this by taking one capsule once a day.

This is leading the patient switches from injectable prophy on-demand therapy. It's exactly what we saw in our market research and clinical trials, and it's already playing out in the marketplace. Great drugs don't sell themselves. We also a fantastic team, Charlie and Alan Hodge, our USGM have assembled an experienced team, but more importantly they're working together working through challenges and obstacles like COVID and achieving great results.

We couldn't be more pleased with the start and the good news, we're just getting, going with so many more patients to reach in the U.S. While U.S. is the largest market, we now have approval in other major territories around the world. Our partner Torii is launching in Japan and we've recently received approval in the EU.

The same planning and investments were made here too. The launch ramp will take longer as these are different markets from the U.S., but we expect these countries to contribute overtime to our goal of achieving $500 million plus in global peak sales. And finally, our pipeline is full with the opportunity we have with our oral Factor D inhibitor BCX9930 for patients suffering from many different complement mediated rare diseases. We're heading into pivotal studies in PNH and proof-of-concept in the prior syndications.

We will apply all the learnings of HAE program and build off that success through 9930 to market to create even greater value as a company that discovers, develops and commercializes multiple oral drugs for patients suffering from rare diseases. Now, I'll turn the call over to Charlie to go over more details about our Orladeyo launch success. Charlie?

Charlie Gayer -- Chief Commercial Officer

Thanks, John. The Orladeyo launch is off to a great start. We're pleased but not surprised. We knew we had a great drug the patients want because they're tired of the physical, psychological and logistical burdens of injectable therapies.

Physicians also tell us they are confident in prescribing Orladeyo for a broad range of patients when they see the long-term data on attack reduction, safety and tolerability. Here's what we're seeing so far. In a very competitive market, patients are switching to Orladeyo. Over half the patients starting Orladeyo for the first time are switching from injectable prophy.

The rest are switching from acute treatment only now that they have an oral once daily prophy option. In fact, the majority of patients on Orladeyo by the end of Q1 were those who switched from other products. The rest were patients transitioning from our clinical trials in early access program. The prescriber base also continues to expand.

Former clinical trial investigators accounted for a minority of Orladeyo prescribers in Q1, roughly 500 physicians treat 50% of HAE patients and our team has reached nearly all of them. Most of these physicians tell us they intend to prescribe Orladeyo, but only a minority has done so thus far. So, there is a lot of room for growth. And finally, payers are reacting favorably to Orladeyo.

Most of the reimbursed products in Q1 came through medical exceptions, but many payers and PBMs also established coverage policies. Our momentum with payers is strong and we expect the great majority of patients to have access to coverage for Orladeyo by midyear. The most important investment we made in this launch was building an experienced commercial team that knows how to execute. Our U.S.

general manager, Allen Hodge; and our U.S. VP of sales, Ron Dullinger wants Cinryze over a decade ago and successfully created the first market for HAE protein. They came to BioCryst because they always knew that an oral drug is what patients really wanted. They attracted a talented and agile team that understands the importance of fighting for every patient in a competitive rare disease market like HAE.

As excited as we are about the Q1 results this team is just getting started. COVID is limited in person sales calls, but vaccines are starting to change this. Our marketing programs are just starting to kick in and expanding reimbursement access is giving patients and prescribers even more comfort in switching to Orladeyo. We are very confident about the growth trajectory, and we believe Orladeyo will reach peak global sales north of $500 million.

The U.S. is the first and largest part of that opportunity, but we expect meaningful sales in Europe. Awareness and understanding of HAE and Europe is on par with U.S., but use of targeted HAE prophylaxis has lagged based on lack of options. Our worked with European physicians and patients tells us that the availability of new options and specifically an oral once daily therapy will more than double prophylactic treatments share to 60% or more patients.

We're taking the same approach in Europe as in the U.S. investing in experienced commercial teams that know how to launch rare disease products. Orladeyo will launch in Germany this quarter and early access programs are active in France and the United Kingdom. We look forward to sharing more about Europe in the coming quarters, and there is yet another Orladeyo under way right now in Japan.

I'll turn the call over to Megan to describe our partners at Torii Pharmaceutical are approaching this opportunity.

Megan Sniecinski -- Chief Business Officer

Thanks, Charlie. We're excited the Japanese launch is now under way after successfully completing the NHI price negotiations last month. There are a few important points I want to emphasize again regarding the commercial opportunity in Japan and what makes it different from the U.S. and Europe.

First, Orladeyo is the only approved prophylactic therapy in Japan. With no competition, Torii has a head start in building the protein market and our oral once a daily medicine is well suited for a population that tends to prefer oral drugs over injections. Secondly, while the vast majority of HAE patients in the U.S. and EU are already diagnosed, Japan lags behind only about 20% of patients are identified in the registry today.

Torii is focused on finding patients and helping to advance their standard of care by providing access to the first approved prophylactic medicine. One reason we chose Torii was based on what they accomplished with Gilead's HIV franchise. Their strategies focused on driving this awareness among physicians and increasing patient identification. This strategy was very successful as they grew the business to almost $200 million annually.

This experience served as a strong foundation heading into Orladeyo's launch. And similar to us, Torii has been preparing well in advance and are fully focused on supporting a successful launch. Lastly, through our partnership economics, we have triggered the $15 million milestone payment following pricing, and we get to share in Torii's success with a tiered royalty from 20% to 40% of net sales. Overall, the Japanese market provides an outstanding long-term opportunity.

We see a strong potential to follow a path similar to what we see in the U.S. in the last decade and expansion of the HAE market, driven by patient diagnosis and adoption of prophy treatment as part of standard of care. As Charlie shared, there is a lot of early momentum in the U.S. launch, and we're not surprised by this excellent start.

Over the course of this year, you will continue to see new clinical data, highlighting how well patients do on Orladeyo overtime. Patients are getting their disease under control, while reducing the impact treatment has on their lives and independence. Our work is also helping physicians to understand how Orladeyo is an ideal treatment of choice for all patients. It offers patients the attack control they desire and the lifestyle freedom and benefits of a convenient, more discreet oral once a daily pill.

Our strategy remains focused on shifting this treatment paradigm. As Charlie spoke about earlier, patients are switching, which is early evidence our strategy is working. We see a very similar unmet need and opportunity in the complement space with our Factor D program. I'll now turn it over to Bill for more on our 9930 progress.

Bill?

Bill Sheridan -- Chief Medical Officer

Thanks, Megan. So everyone here discovered and developed Orladeyo and their clinical trial collaborators around the world, it is all great to see the Orladeyo launch doing so well. For hereditary angioedema Orladeyo is effective, it is safe and because it is oral dramatically reduced during therapy, very similar shift is beginning for patients with paroxysmal nocturnal hemoglobinuria. A very serious rare disease with no approved oral treatments and the standard of care is lifelong intravenous infusions.

BCX9930 has the great opportunity to substantially improve disease control in PNH currently available intravenously infused C5 inhibitors. These do a good job controlling intravascular hemolysis, but many patients are non-anemic, are still transfusion dependent and continued to start suffering from symptoms like fatigue. That's because C5 inhibitors cannot control extravascular hemolysis. The clinical advantages come on top of the obvious patient benefits of oral administration and we are moving the program very quickly to get this medicine to patients with PNH.

I'm pleased to report that we've now reached agreement with the FDA on both the design and the endpoints for our PNH pivotal trials. The two pivotal trials BCX oral and BCX9930 monotherapy and all support the indication of treatment of PNH. The dose will be 500 milligrams BID. One trial will include patients who had an inadequate response to C5 inhibitors, and the other trial will include patients not currently receiving complement inhibitors including those naive to these drugs.

Patients in both categories need releases anemia treating from transfusions and relief of symptoms. The primary endpoints of both pivotal trials agreed with the FDA will be changed from baseline hemoglobin in direct clinical measure to release of anemia. In both trials, we will measure the impact on nasal transfusions as a secondary endpoint and we will also capture other important outcomes in PNH such as fatigue scores, PNH clone size and diversity biomarkers hemolysis. The outstanding results we reported in March, with main hemoglobin change from baseline of 3.3 grams per deciliter in C5 inadequate response to patients and 3.5 grams per deciliter in treatment naive patients, physician BCX9930 very well for success in a pivotal trial.

As you heard in March hematologist and patients with PNH are very excited by the prospect of a treatment that could dramatically improve outcomes and eliminate the needs of IV infusions. We are convinced that success in our pivotal studies will drive a paradigm shift in PNH toward oral proximal complement in addition with BCX9930. So, what's next in this program, we are now ready to move directly into the pivotal trials in PNH in the second half of the year, using the designs now agreed with the FDA. We will also move into a proof of concept trial is selected to nephritis indications in the second half of this year.

BCX9930 representative pipeline in the molecule we're very excited to be moving this program so quickly because we know patients are waiting. Now, I'd like to hand the call over to Anthony.

Anthony Doyle -- Chief Financial Officer

Thanks, Bill. We've continually said that we are focusing our investments where they can drive the greatest value. With Orladeyo now approved in three key global territories, the commercial team in the U.S. getting the launch off to a great start and the very positive data that we have a BCX9930, we are executing the strategy and we are well positioned for future growth.

You can find our detailed financials in today's earnings press release and I'd like to call your attention to a few items. Net revenue for the quarter was $19.1 million of this $10.9 million came from sales of all the Orladeyo in the U.S. Our operating expenses not including non-cash compensation for the quarter was 63 million with the incremental investment from previous quarters focused on the development of BCX9930. We ended Q1 with $244 million in cash.

This cash, in addition to access to the additional $75 million from Athyrium and now revenue from Orladeyo continues to give us cash runway into 2023. Since this is our first full quarter of Orladeyo revenue, I want you to take a minute to remind you of our approach and a couple of key items. We recognized revenue when a sourced sold, specialty pharmacy shifts Orladeyo to patients for use. Each shipment contains a 28-day supply of Orladeyo.

These are shipments directly from the specialty pharmacy to patients, so they are true sales and you will not see any inventory or channel stocking in our revenue numbers. When we look at gross to net, the biggest impact of the moment will be driven by non-reimbursed shipments. Our quick start program has proven to be a real differentiator and is delighting customers in the ease and speed of getting access to Orladeyo, sometimes within 24 hours of a start form being submitted. The quick start program and our patient assistance program both resulted in the growth in center of adjustment being higher now than it will be once the launch is in a more mature phase.

Because growth net is so fluid early in the launch, we are not providing growth in our guidance, but as we continue to progress with the launch, you should expect our gross to net adjustment to move in line with other rare disease products. So, what does our strong Q1 mean for future periods? Charlie's team did a great job of converting clinical trial patients, giving us a bolus of patients in the first quarter. Additionally, the team has achieved great success in helping many new patients switched from injectable prophylactic or acute only medications. Together, this gives us a really strong foundation for future periods.

We have not provided revenue guidance as there are still several variables that will impact the growth trajectory of revenue that we need more time to better understand. First, what is the steady state of monthly prescriptions? While we've been very encouraged with the numbers to-date, we need more time to see it play out. Next, what does customer retention look like over a longer time? In our clinical trials, this number was about 75% through 48 weeks, telling us that Orladeyo was well-tolerated and is providing outstanding attack control. While we believe we will see this level of persistence in the market, it's still too early to confirm that this is the case.

And lastly, what does the trend look like when the vast majority of patients have reimbursement. The $10.9 million in net revenue we are reporting is only from patients whose Orladeyo prescriptions are reimbursed. As Charlie described, we're making good progress, getting Orladeyo onto policies. But the pace of reimbursement over, especially in the second quarter will be a key driver in the rate of revenue growth for us over the remainder of the year.

While early in the launch, we are very encouraged by the results to-date. We have a lot of work to do, and a lot more patients to get this next generation of drug too. We have a great product in Orladeyo. There is strong patient demand for it, and we have the team to execute on making our launch a success and getting us to our peak target of $500 million plus in the coming years.

With that, I'll hand it back over to John.

Jon Stonehouse -- Chief Executive Officer

Thanks, Anthony. This is what execution looks like. We're off to a great start with the launch of Orladeyo in the U.S. and starting the launch in other major parts of the world, all contributing to what we believe will be a $500 million plus global peak sales product.

Add to that, our plan to advance into pivotal studies in PNH with 9930 and in parallel moving into other indications with this pipeline in one molecule. And finally, having the financial flexibility that comes with a strong balance sheet and revenue generation allows us to focus on execution and value creation, the evidence is clear that BioCryst is transforming into a company with product revenue, a full pipeline, and a discovery engine that produce these compounds and will continue to produce more. That concludes our prepared remarks. We'll now open it up for your questions.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Jessica Fye of J.P. Morgan. Your line is open.

Jessica Fye -- J.P. Morgan -- Analyst

Hey, guys. Good morning. Congratulations on a strong quarter. I was curious if you could add some more color about specifically which agents do you see a patient switching on Orladeyo are switching from?

Jon Stonehouse -- Chief Executive Officer

Bill, you want to take that?

Bill Sheridan -- Chief Medical Officer

Yeah. Hey, good morning, Jess. Thanks for the question. We're seeing patients switch from all the different therapies really in proportion to what you'd expect from the mark their market share.

So, as I mentioned, more than more than half the patients are switching from injectable prophy and that means Takhzyro, Haegarda, Cinryze proportion to their market share.

Jessica Fye -- J.P. Morgan -- Analyst

OK. And you mentioned that some scripts were not reimbursed in the quarter. Can you say what proportion of first-quarter scripts were not reimbursed?

Bill Sheridan -- Chief Medical Officer

We haven't commented on the specific details, but as Anthony mentioned in his comments, what we're doing with nearly all patients is starting off in our quick start program. And then we work with patients and providers to go through prior authorizations. And in Q1, most patients get access through medical exception, but we're making great progress with payers and we expect to make continued progress through mid year.

Jon Stonehouse -- Chief Executive Officer

And just Charlie made comments in his prepared remarks around the more policies that are in place where Orladeyo is on formulary, the more interest there's going to be by both doctors and physicians.

Jessica Fye -- J.P. Morgan -- Analyst

Got it. And just the last one on question. You mentioned that longer term that'll move in line with other rate disease drugs. So, can you just characterize what typical growths are in or disease?

Jon Stonehouse -- Chief Executive Officer

Yeah. From a growth perspective, what we'd be looking at getting is kind of into the teens 20s type of frame.

Jessica Fye -- J.P. Morgan -- Analyst

Great. Thank you.

Bill Sheridan -- Chief Medical Officer

Welcome.

Operator

Thank you. Next question comes from the line of Liisa Bayko of Evercore ISI. Your line is open.

Liisa Bayko -- Evercore ISI -- Analyst

And I wanted to add my congratulations on a great quarter. I'm going to turn to the PNH studies for a moment. You already discussed what sort of control will look like in both of the studies?

Jon Stonehouse -- Chief Executive Officer

Bill, you wanted to take that?

Bill Sheridan -- Chief Medical Officer

Sure. Hi, Liisa. Thanks for the question. I am super excited about moving into these studies, of course, and one study will be a superiority trial against C5 inhibitors in patients who have had an inadequate response and the other study in patients who are not taking a C5 inhibitor to the control group of placebo.

Liisa Bayko -- Evercore ISI -- Analyst

OK, I see. And can you maybe describe the, I guess, how you'll be looking at superior C5? Will you be looking at combination therapy then for the patients that are inadequate responders or people will be moving on to monotherapy? How will that work for the inadequate responders group?

Bill Sheridan -- Chief Medical Officer

Sure. Both studies have designed as fit to BCX9930 monotherapy. So patients will be randomized in C5 inhibitor trial. We randomized to continue the current treatment or stop BCX9930 monotherapy and discontinue their current treatment.

So this is the goal here is a label from monotherapy. There is a broad indication to treat patients with PNH and this is a reason to the study designs just reaches to outline to support the label.

Liisa Bayko -- Evercore ISI -- Analyst

OK. And how do patients go onto monotherapy from something on a C5? How does that work? Is it just kind of switch or is there a combination therapy and then a withdrawal? How does that work?

Bill Sheridan -- Chief Medical Officer

No, the C5 inhibitor stopped and the oral drug is started, 9930 started, this is just a simple switch.

Liisa Bayko -- Evercore ISI -- Analyst

OK. We haven't seen the data yet in that population in terms of being on monotherapy. Can you give us a sense of when we might see that in your Phase 1, Phase 2?

Bill Sheridan -- Chief Medical Officer

Sure. The protocol doesn't specify a particular timeline and that's the physician chosen call, but we expect that we will be able to share the data at the end of the year. Now, the regulator is more asked us for that data in order to start the study because we are very confident in the drug on the basis of the monotherapy results from the naive patient population. The disease is the disease and set disease target the same, the dose is the same.

So, it's not necessary for us to see that data before we start the study.

Liisa Bayko -- Evercore ISI -- Analyst

OK. Good. And then I guess just turning to Orladeyo, really great of the gates, is there any kind of additional color you can provide on either the percentage of patients that were on your quick start program, receiving drugs that way and the percentage of prescriptions like and or any color on persistence? Those are obviously the key questions to help to guide to us as you think about the rest of the year, launching off of this really great start? So, just help in if you could provide some additional color there? And that's my final question. Thank you.

Bill Sheridan -- Chief Medical Officer

Sure, Lisa. So on the percentage of quick start, so, in Q1, nearly all patients started on quick-start and that's part of our strategy. As we work with them to get access, and as I mentioned, year most patients got reimbursed it through medical exception, if we were not able to do that in Q1, they'll continue on free good until the payers established policies. And then as far as your question about persistence, as Anthony had mentioned, we expect we had great results in our clinical trials with about 75% of patients stayed on for at least a year, that's what we expected in the real world.

So far the patient experience has been great, but it's too early to say what the long-term persistence rate will be.

Liisa Bayko -- Evercore ISI -- Analyst

And OK. And quick start program is about -- is it a monthly prescription until it didn't get on reimbursement?

Bill Sheridan -- Chief Medical Officer

That's right. It's a month, and if there is not reimbursement in a month there, we will continue them either on quick-start or on our patient assistance program.

Liisa Bayko -- Evercore ISI -- Analyst

OK. I guess that just leads me to one final question, approximately how long is it taking to get on to reimbursement at this point?

Bill Sheridan -- Chief Medical Officer

So in Q1, it's all over the board. Everything from a few days to patients still being on the program and by mid-year, we expect that to really stabilize as the great majority of patients will have access to coverage through their plans.

Jon Stonehouse -- Chief Executive Officer

And Lisa, the theme here is that, as the year progresses, we will have more and more people on paid drug and fewer and fewer on quick start. That's, that's the plan.

Liisa Bayko -- Evercore ISI -- Analyst

OK. All right. Thanks a lot guys.

Jon Stonehouse -- Chief Executive Officer

Thank you.

Operator

Thank you. Next question comes from the line of Ken Cacciatore from Cowen and Co. Your line is open.

Ken Cacciatore -- Cowen and Company -- Analyst

Hey, guys, congratulations on the early progress. Just wondering, we hear really good things about the interactions on both clinician and patient level via your hub. So, just wondering, as it seems to be ramping, a little bit faster, do you feel your staff appropriately? Can you talk about some of the early learnings from this really kind of more personalized approach and things that as things are getting under way that you're maybe changing or again, if your staffing a little bit more? Then on EU, just wondering it looks like a potential really focus selling efforts to talk about where these patients are domiciled? Is it going to be fairly easy to get at some fairly difficult? Maybe some of the learnings from the injectibles, I know you feel, and you feel as well, that things should go better there, but maybe a little bit more nuance around Europe? And then lastly, maybe for Bill, I know, it's really early, just announcing you're going to start these pivotals, but if you take a shot at timing of results, maybe a little bit of nuance here in terms of the kind of competitive landscape to enroll patients, but any kind of shot at when we might expect to see data would be fantastic? Thank you.

Jon Stonehouse -- Chief Executive Officer

Great, thanks. Thanks for the questions Ken. So, the first question you had just about our specialty pharmacy patient services program and staffing. One of the great things about having a sole sources, we really prepare for the right staffing.

And then Allen Hodge, his team has done a great job working with the SP to pivot as we see this demand from patients. So, increasing staffing appropriately increasing procedures, they're really quick and making those changes to serve the patients well, and it's making a difference. As far as the EU, really good question about, access to patients and how easy or difficult is that. The great thing about the EU is that treatment centers are very concentrated.

So, you can literally have hundreds of patients within a given center. And so what our teams are doing is working with the HAE experts that those centers to make them aware that Orladeyo is coming and to reach out to their patients and bring them into the center. So, we're really enthusiastic about the opportunity there.

Bill Sheridan -- Chief Medical Officer

And Ken, I'd add that, BioCryst is a known entity to these doc's that treat HAE in Europe. And we've been doing clinical trials all the way back to our first generation progress. And so, we've got fantastic relationships, and they know the Company, they've been involved in our trials and so their excitement level time.

Jon Stonehouse -- Chief Executive Officer

Ken, what a great question when will the study finished? I wish I could be specific and give you a prediction. I think it's really difficult at this stage we need to get them up and running. What I can tell you is that we have a great clinical execution team here at BioCryst. And we are going to approach this on the basis that patients really need this drug, it's going to be a major advance in PNH and this is what we believe.

And so we'll be ramping as fast as possible. And just like in HAE will go to the best centers all around the world to get the studies done. And just like HAE, in most related cases patients, getting patients on clinical trials is a competitive activity that may believe it has great offerings here with all effective inhibitor. So we look forward to seeing the study start and the accrual I think and they will be in a better position to making it -- finish.

Charlie Gayer -- Chief Commercial Officer

Yeah. I'd just add. It's hard to say because we just don't know what the rate of enrollment will be, right, in a competitive space in a much larger study than what we've studied so far in PNH. It's just super hard to predict.

But one thing I will say is Bill's team is excellent and their aim is to be the sponsor of choice, and this is where big doesn't necessarily help you, small companies that pay attention at least that gives the extra TLC make a difference in enrollment. And so, I am super confident that Bill's team will do that.

Ken Cacciatore -- Cowen and Company -- Analyst

Very helpful.

Operator

Thank you. Next question comes from the line of Serge Belanger from Needham and Company. Your line is open.

Serge Belanger -- Needham & Company -- Analyst

Hey, good morning and thanks for taking my questions. A few on Orladeyo, first, apologies if you covered this before, did you disclose a number of patients were on drugs at the end of the first quarter? And I guess how many of them are patients transitioning from clinical trials or the early access programs?

Jon Stonehouse -- Chief Executive Officer

Hey, Serge. Good morning. We have not disclosed the detail on that. What I can say is that, the number of patients on Orladeyo continues to grow every day as patient switch to Orladeyo.

In Q1, what we did say is that, the majority of patients, by the end of the quarter were new patients switching, and then the rest of them were those transitioning from our clinical trials and EAP, and that transition program finished in Q1. So that bowl as Anthony talks about is complete and that everything going forward is growth, as patients switch to Orladeyo.

Anthony Doyle -- Chief Financial Officer

Yeah. And just one point of clarification on that, that complete means that they're switched from clinical trials to quick-start or are patient assistance. They have to go through the same process of reimbursement, like any other patient. And so, some have been reimbursed, some have not.

Serge Belanger -- Needham & Company -- Analyst

OK. And I think you talked about physician base about 500, serving about 50% of the HAE patients. How big is the next set of physicians serving the other 50% that you need to address?

Jon Stonehouse -- Chief Executive Officer

Serger, there easily another 1,000 plus physicians out there and we're reaching them as well. We're really concentrated on that Top 500 just because they are -- they have more patients and they really know HAE. So, that's our priority, but we're reaching the other doctors as well, and we're getting prescribing from them too.

Bill Sheridan -- Chief Medical Officer

And Serge I'd add, what makes this achievement in the first quarter with the sales that Charlie and his team have generated even more remarkable is, they did it in COVID, right? And so, we're already seeing things starting to open up with vaccination, that's only going to get better as the course of the year goes on.

Serge Belanger -- Needham & Company -- Analyst

OK. And then while we're on COVID, what has been the overall impact with restrictions? Are you seeing limitations on the number of patient switches? And is that something that, you expect will increase as restrictions lift?

Bill Sheridan -- Chief Medical Officer

I think first of all, Serge, as Jon was talking about it. COVID limited our in-person interaction with providers fewer than 50% of our calls were in-person, that's going to make a big difference as we're able to do more in-person visits. And we had a great quarter despite all of this. Another piece is that, oral is easy for doctors to prescribe.

So, it's something that many physicians have been comfortable prescribing Orladeyo in a remote environment to their patients. With more in-person visits though, it's just it's more opportunity and we're excited for what's to come.

Serge Belanger -- Needham & Company -- Analyst

Thank you. Congrats on the progress.

Operator

Thank you. Next question comes from the line of Maury Raycroft of Jefferies. Your line is open.

Kenny Chan -- Jefferies -- Analyst

Hi. This is Kenny Chan on for Maury Raycroft. I have two questions. One on Orladeyo, healthy progress on the formulary adoption versus net reimbursement by medical exception, have you encountered any pushback on the cost effectiveness from insurances? And how are the reimbursement's conversations going are insurances with the ICER reports? And so the second question on the PNH program, what was the FDA feedback on LDH levels? And is there a specified LDH threshold that would trigger a safety concern? Thanks.

Jon Stonehouse -- Chief Executive Officer

Bill. You want to take this?

Bill Sheridan -- Chief Medical Officer

Yes. Thanks, Kenny. As far as the payer progress for policy progresses, is, we said in our comments, it's going really well. In Q1, it was mainly medical exception that we were getting access, but several payers and PBMs put Orladeyo on formulary.

And we expect a lot of acceleration of that over the over Q2. Cost effectiveness, no, this is the lowest price prophy on the market. And payers have reacted really well to our pricing strategy as well as the profile of the drug. And then if they see the demand coming from patients switching to Orladeyo, it's really encouraging payers to establish coverage policies quickly.

So, we're very pleased with where we are.

Jon Stonehouse -- Chief Executive Officer

And let me stress one point I made in the prepared remarks this drug works, right. If people are switching that are controlled on prophy therapy, our drug and they're staying on our drugs. So this idea of effectiveness, this drug work is just really want to stress that. Bill, do you want to take the FDA feedback on LDH?

Bill Sheridan -- Chief Medical Officer

Sure. Kenny, thanks for the question. We do have a secondary endpoint of percentage change from baseline and LDH. There is no threshold either as an endpoint or as a safety concern for that matter.

So LDH is a useful biomarker in person in Romania with a change of baseline hemoglobin, hemoglobin going up. And the improvements in transfusion burden with transfusion avoidance things cost the most important number transfusion going down very important clinical outcomes. It's also worth stressing, but another very important secondary endpoint is evaluation of quality of life with tools such as the assessment fatigue score. So measuring fatigue is important too.

Jon Stonehouse -- Chief Executive Officer

And Bill, you might want to just talk about the interaction with the FDA and that it was focused on clinical benefit, right. Biomarkers are important, but clinical benefits more important.

Bill Sheridan -- Chief Medical Officer

Right. So the regulator's of course wants to see clinical outcomes being treated as important endpoints in clinical trials. So, that's why we have changed from baseline in hemoglobin as the primary endpoint and transfusion avoidance says a key secondary endpoint and that's give us a inch pain in evaluating a treatment of anemia after all. For this whole range of interesting biomarkers, we're going to measure them.

LDH is not viewed as important enough to be a primary endpoint. It's really very simple.

Kenny Chan -- Jefferies -- Analyst

Thanks.

Operator

[Operator instructions] Next question comes from the line of Brian Abrahams of RBC Capital Markets. Your line is open.

Brian Abrahams -- RBC Capital Markets -- Analyst

Good morning. Thanks for taking my questions and congrats as well in the early launch. My first question is on the launch. I was wondering, if you could maybe parse out the pent-up demand for patients new to Orladeyo? I guess I'm wondering, how long into the year might you expect first quarter's rate of switching from existing acute or prophylactic therapy to continue?

Charlie Gayer -- Chief Commercial Officer

Hey, Brian. It's Charlie. Good question. And yeah, there was pent-up demand and we expected that.

So they're always early adopters. What we're really pleased about is, the demand is continuing. So, we're seeing patients switched to Orladeyo literally every day. And then as I mentioned in my remarks, there is a lot of opportunity to come as all these physicians who we've reached, but haven't yet prescribed.

They're telling us that they're planning to have the conversation with their patients and prescribed in the future, so a lot of opportunity to come throughout the year.

Jon Stonehouse -- Chief Executive Officer

Yeah. We don't think this is just one quarter plus and then it's going to peak out Brian that we expect that this is going to continue to be strong through the course of the year. And we said it's a $500 million plus global peak sales product, and we're even more confident in that.

Brian Abrahams -- RBC Capital Markets -- Analyst

Got it. That's really helpful. And then, I'm curious what sort of feedback you're getting on, how real-world efficacy and safety and tolerability is comparing to the clinical trial setting, any surprises there? And then I know its early days, but I'm curious what you're seeing with respect to persistence and compliance for the new patients to therapy versus the rollovers from the expanded access and quick-start?

Jon Stonehouse -- Chief Executive Officer

Yeah. I'll take the first part, Charlie, if you could take the second that would be great. So I'm smiling, as you asked that question, because the docs and patients told us that, these drugs do way better in the real world than they do in clinical trials. And so, I think, our clinical trials doesn't really represent the real benefit that we're seeing from patients.

Megan mentioned that, we're looking at the data from APeX-2 up to now 96 weeks and it just keeps looking better, right? And so, I'll say it again. This drug works. People are getting a real benefit. They are getting control of their disease, and by the way, they're doing it on one capsule once a day.

So, it's just a huge, huge benefit.

Charlie Gayer -- Chief Commercial Officer

And then, Brian, as your question about experience of rollovers versus new patients, the great majority of the patients who are on our clinical trials chose to continue on Orladeyo and the commercial world because they're having such a great experience, and the early word back from patients that we hear back from our specialty pharmacy, and we hear back through physicians via our reps, the early feedback is very strong, patients newly switching to Orladeyo or having a great experience as we expect it. So, we're pleased and to my point earlier, we expect more patients to continue to switch Orladeyo based on what they hear from their peers about their experience.

Brian Abrahams -- RBC Capital Markets -- Analyst

Great. Thanks so much.

Jon Stonehouse -- Chief Executive Officer

You're welcome.

Operator

Thank you. Next question comes from the line of Tazeen Ahmad of Bank of America. Your line is open.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Hey, good morning guys. Thanks for taking my questions. On Orladeyo, as it relates to, I guess treatment naive patients, what is your latest market data telling you about the percentage of patients to have HAE, who are currently not on any therapy? And related to that, I'm just wondering, do you think, once COVID starts to clear and more offices are to reopen that the percentage of waits of new patient or treatment naive patients that are receiving scripts will normalize more relative to what you're seeing in the early stages of the launch? And then I have a couple of follow-ups.

Jon Stonehouse -- Chief Executive Officer

See, I think, I think I've got your question, but let me, let me address it in a couple of different parts. What we saw prior to the launch of Orladeyo is about 60% of patients are on prophylaxis. And so in the first quarter, we're seeing more than half of the patients coming Orladeyo, switching from those other prophy products. Most of the remainder of patients switching to Orladeyo are switching from only treatment, so they may be naive to prophylaxis, but they've been treated with acute only.

Our research tells us that the number of truly HAE treatment naive patients they're not on acute not on prophy is small. That's a small opportunity in the future, but most of these patients are treated well by their doctors to have at least an acute therapy and those patients are deciding to switch to prophy now that they can do it with an oral once daily option.

Bill Sheridan -- Chief Medical Officer

So, this is -- I can't stress this enough. This is a switch strategy and it's working, right. That is if you walk away with anything today walk away with this is a marketplace where people are on prophy therapy and acute on demand therapy, and they're switching to an oral drug, right. So, that's what, we saw that in the market research.

We saw it in the clinical trials, and now it's playing out in the marketplace, which is great. And it's only the first quarter. And to your point about COVID, I think there's opportunity here right? I think, access of our reps to docs has been challenging in some parts of the country, they've been really diligent and resourceful. And they produce a great result in the first quarter, but I think as things open up more, it's going to get better.

And I think the same goes for doctors and patients, right? It's just been harder. It's been telemedicine, maybe they're putting off their visit. And so, I think that gets better as more people get vaccinated and more people start to go see the doctor.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK, thanks for that colors Jon. And then Japan, I know it's just very, very early in the launch, but in terms of the trajectory what to expect it to be similar to what we would expect to see in the U.S. And do you have any visibility on what typing in Japan is?

Jon Stonehouse -- Chief Executive Officer

Megan, you want to take them?

Megan Sniecinski -- Chief Business Officer

Sure, sure. So, on the trajectory to be I think, as we've been sharing Japan is a very different market than the U.S. and Europe and as a decade behind. And so, we're absolutely thrilled about the opportunity that Torii has to really build and shape it.

So, I think our trajectory in the near-term is more tempered also to Japan is in a state of emergency currently with COVID and a different rollout with the vaccine, so that may also slow that initial ramp. But as I shared in my remarks, we see this as a really strong long-term potential as Torii drive the adoption of protein but also the expansion of the market through for more diagnosis and treatment. And then to your second question, with our pricing, negotiations completed last week, last month, excuse me, we net it out with a price or around $250,000 per patient per year. And for our, we're really proud and excited about that price point and opportunities it represents for patients and for Torii so all-in-all, they're equally excited to now be out of gate like the U.S.

has been for the last few months, and we're excited to see what they can deliver.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK. Thank you. And then maybe just one question if I could on PNH. There are a few trials that you are running, I know it's difficult to take guess on how long it's going to take to enroll, but for the naive recursive see placebo place and inadequate responder trial, excuse me, would you expect both to read out at around the same time, or do you think one could enroll faster than the other?

Jon Stonehouse -- Chief Executive Officer

Bill, you want to take that one?

Bill Sheridan -- Chief Medical Officer

Sure. It's very difficult to say at this stage, either of those possibilities could come to pass, right. They could read at approximately the same time or one could move much quicker than the other. I think it's too early to know.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK, thank you.

Jon Stonehouse -- Chief Executive Officer

Thanks, Tazeen.

Operator

Our next question comes from the line of Gena Wang of Barclays. Your line is open.

Unknown speaker -- Barclays -- Analyst

Hi. Good morning. This is Swapnil on for Gena. Just one question on PNH.

So, can you tell us about overall the size of the trial could be for this Phase 3 and then let what specific PKPD that you looked expect to go ahead with the 500 mg BID dosing versus 400 mg?

Bill Sheridan -- Chief Medical Officer

Thanks for your question. So, we're going to reserve additional details about the studies for later this year, might be at a medical meeting or something like that. So, we will be happy to share all of those details at that stage. With regards the selection of the dose, the PKPD modeling uses all of the information you have for example on in vitro complement assay and things like the clinical outcome and biomarkers like LDH.

This is where LHD is actually quite useful as fairly rapidly responsive biomarkers that follow the dosing and before that disclosure through last year about how the higher doses obviously superior to lower doses. So, I think that started as that goes into the model as well as goals of the drug levels.

Jon Stonehouse -- Chief Executive Officer

And let me just add on the size. I mean, these are rare disease trials, right? And so, typically in rare disease trials, you need a couple of 100 patients on the drug for a year for safety, if it's a chronic therapy. And the expectation is, it'll be something like Bill with over 300 in the HAE program, when we filed. So, it's roughly about.

Unknown speaker -- Barclays -- Analyst

OK. Thank you. And then one follow-up question. So for the slightly higher levels that we see for LDH that was previously presented and maybe a shorter duration of pigment and make smarter sample size, so do you expect 500 mg over a period of time to get you below that 1.5 upper limit of normal?

Charlie Gayer -- Chief Commercial Officer

So that particular target is not an end point in our study. So, I think that's the most important response to the question. In fact, there actually is nothing magical about 1.5 times upper limit is normal of the LDH. And the LDH is certainly useful biomarker and will measure it and it's included as a secondary end point.

It's more relevant in the setting when you're starting out with a high LDH and not on C5 inhibitor therapy. But it's not as important as increasing the hemoglobin and reducing the transfusions and improving the fatigue. So specifically and I see the question, I think, what we've seen in all of the other studies, all of the other complement inhibitors, when sponsors have published individual patient data over a long period of time, you see that the LDH fluctuates. And that'll be typical in this disease we expect to see the same thing.

So, if it's taper long enough, the LDH can fluctuate by the time. But if people are not anemic and nothing transfused and feeling well, then we've achieved all of the principal objectives of treatment of PNH.

Jon Stonehouse -- Chief Executive Officer

Yeah, what's most exciting is we now have an agreement with the FDA that hemoglobin is the primary endpoint change from baseline, which is really exciting.

Unknown speaker -- Barclays -- Analyst

Got it. Thank you for the color.

Jon Stonehouse -- Chief Executive Officer

Welcome.

Operator

Thank you. Your final question comes from the lines of Jonathan Wolleben of JMP Securities. Your line is open.

Jonathan Wolleben -- JMP Securities -- Analyst

Hey, good morning, and sharing my congrats on the strong launch. Just a few for me. I'm wondering if the 10.9 million figures for Orladeyo, and if that's net of your royalty payment and if there's any meaningful contribution from ATU in France?

Anthony Doyle -- Chief Financial Officer

Yes, so the $10.9 million is not mesh of the royalty payments. The royalty payments are -- just as a reminder 8.75% of those net revenues up to 350. And then once we get over 350 across then to 2.75, we are about here to below the line between operating income and that income basically, as an interest expense. Jon? In terms of the ATU, no, nothing, nothing, nothing.

Jon Stonehouse -- Chief Executive Officer

So, that was that was all U.S. sales of 10.9.

Jonathan Wolleben -- JMP Securities -- Analyst

Great. And then, just one question on the market with you're seeing patients switch from acute, if you have any sense on the percentage of patients now of all HAE patients who are on prophylaxis. And where do you think that kind of levels out in the future now with you guys on the market? And you're saying more switches over the prophylaxis?

Charlie Gayer -- Chief Commercial Officer

Good question, Jon. As I mentioned, what we see, we're very confident that at the time of the Orladeyo launched about 60% of U.S. HAE patients were on prophylaxis. And so, as patients also switched from acute therapy only to Orladeyo, that number is going to grow.

And what physicians tell us is that in the future, that is about 80% of patients, they expect 80% of patients to be treated with prophy. So, the acute market is shrinking every day and we expect that same kind of trend to occur in Europe after our launch there.

Jon Stonehouse -- Chief Executive Officer

And it's turning out that the market research that Charlie has been doing is playing out in the marketplace.

Jonathan Wolleben -- JMP Securities -- Analyst

Perfect. Thanks for taking the question and congrats again.

Jon Stonehouse -- Chief Executive Officer

Thanks, Jon.

Operator

Thank you. There are no further questions at this time. I will now turn the call back to Jon Stonehouse for closing remarks.

Jon Stonehouse -- Chief Executive Officer

So I've done a lot of earnings calls in my 14-years at BioCryst. And I got to say, this is one of the most fun and exciting ones that I've been a part of, we've got a great launch with a great product and a great team and we're just getting started. And so it's really exciting to have a product that's generating real revenue. We have a green light to go into pivotal studies with our next program.

That's an entire pipeline in a molecule. And so we're going to be starting up pivotal studies later this year. So it doesn't get a whole lot better than that. And our focus now is execution.

I'm just so proud of the team and the just incredible focus and execution that they deliver that, and we'll continue to do that. So thanks for your interest in our company and have a great day.

Operator

[Operator signoff]

Duration: 59 minutes

Call participants:

John Bluth -- Senior Vice President, Investor Relations and Corporate Communications

Jon Stonehouse -- Chief Executive Officer

Charlie Gayer -- Chief Commercial Officer

Megan Sniecinski -- Chief Business Officer

Bill Sheridan -- Chief Medical Officer

Anthony Doyle -- Chief Financial Officer

Jessica Fye -- J.P. Morgan -- Analyst

Liisa Bayko -- Evercore ISI -- Analyst

Ken Cacciatore -- Cowen and Company -- Analyst

Serge Belanger -- Needham & Company -- Analyst

Kenny Chan -- Jefferies -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Unknown speaker -- Barclays -- Analyst

Jonathan Wolleben -- JMP Securities -- Analyst

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