BioCryst

BioCryst Pharmaceuticals (BCRX)
Q2 2023 Earnings Call
Aug 03, 2023, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the BioCryst second quarter 2023 earnings call. All participants will be in a listen-only mode. [Operator instructions] As for today’s presentation, there will be an opportunity to ask questions. [Operator instructions] Please note this event is being recorded.

I would now like to turn the conference to Mr. John Bluth at BioCryst. Please go ahead.

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

Thank you very much. Good morning and welcome to BioCryst’s second quarter 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 will answer your questions. Before we begin, please note that today’s conference call will contain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information as well as the company’s future performance and/or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from any future results or performance expressed or implied in this presentation.

You should not place undue reliance on these forward-looking statements. For additional information, including a detailed discussion of our risk factors, please refer to the company’s documents filed with the Securities and Exchange Commission, which can be accessed on our website. 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 release section of our investor relations website at biocryst.com.

I’d now like to turn the call over to Jon Stonehouse.

Jon Stonehouse — Chief Executive Officer

Thanks, John. The strong step-up in revenue that we expected and achieved in the second quarter 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 of revenue for the year and $1 million 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. HAEA patients since 2019, which was before the approval of Orladeyo.

Our 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 03 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, John. Second quarter results for Orladeyo rolled out as we expected. The long-term linear growth in patients on therapy continued and revenue jumped following the first quarter 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 first quarter in the United States for net patients added to therapy, we added about the same number of patients again in the second quarter. 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 second quarter last year, even though our current patient pace is significantly larger.

So 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 pace, 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%. So we made a lot more progress after reauthorizations were completed. Every percentage point of our current patient pace that we move to paid therapy is worth about $4 million in annual revenue.

So these improvements are very meaningful. Based on the trends we see in the work our team is doing, we expect to see continued steady improvements in that percentage over the next few years. We are confident we will reach our long-term goal of getting over 80% of U.S. patients on Orladeyo to pay 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 Jon said earlier, we recently attended the U.S. HAEA 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, one-daily prophylaxis therapy. We’re 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 and we keep improving.

I am still proud of our global teams and how they are 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 HAEA 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 toward bringing Orladeyo to the pediatric population. The burden of HAE, and in particular the burden injectable therapy, is especially difficult for children.

That is why we are 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 am pleased to note that enrolment is proceeding as expected. Turning now to the pipeline, we are looking forward to our R&D day in November, where we will 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 and discovery in early development. Adding these options then increases our overall chances for success in achieving that goal of bringing additional products through registrations and to patients. 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, faculty inhibitor with one 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 the 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 will stop development.

It is early, and there is still plenty of unknowns with BCX10013 program, but we do have two updates to share with you today. We have restarted dosing in our multiple sending 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.

Now, we will take our healthy volunteer dosing higher to refine our PK model data set with daily dosing at 160 milligrams for 14 days. This is in parallel to the work we will do in patients to obtain more robust information for a PK model, and eventually inform pivotal, final pivotal dose selection. We are 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, one-stale dose that meets our criteria to move forward into a pivotal program in renal, complement mediated diseases like IgAN. Beyond BCX10013, we continue to build and advance our early pipeline as we invest in discovery for new targets. We are now ready to share our exciting progress with a growing pipeline of molecules and 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 will turn the call over to Anthony.

Anthony Doyle — Chief Financial Officer

Thanks Helen. Global Orladeyo revenue for Q2, coming in at $81 million, we saw the step up that we anticipated from Q1, based on the strong second quarter revenue performance and continuing underlying patient growth and similar to last year’s quarterly cadence, we anticipate that revenues will increase in the third and then again in the fourth quarter. 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 million over the next two quarters and we’re confident that we will achieve our revenue guidance of no less than $320 million for the year.

You can find our detailed second quarter 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 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 and November. We reiterate our full year opex guidance at $375 million for the year flat to prior year. Cash at the end of the second quarter 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 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 negative $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 negative $0.24 for the quarter. With the continuing strong performance of Orladeyo, as we move toward our 2023 goal of no less than $320 million on onwards to peak sales 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 — Chief Executive Officer

Thank you, Anthony. So we had a great quarter, whether it’s the Orladeyo performance or the advancing of the pipeline and that is a direct result of great execution, and so I want to thank the BioCryst employees for that. We plan to report Q3 earnings on November 02 from Birmingham the day before our R&D Day and 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 be asking why are we holding this on a Friday afternoon in Alabama, and 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. And 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. So we look forward to hosting our R&D Day on November 03 in Birmingham, Alabama.

And that’s it for our prepared remarks. We’re now going to open it up for your questions.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad — Bank of America Merrill Lynch — Analyst

Hi, guys. Good morning and I’ll start looking for a flight 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 fourth quarter.

I think people would be just at knowing how your growth, which is very strong, could turn into outside growth in coming years. And where do you see your areas of real unmet need now that you’re 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, I can take that. So first of all, the question about the second half of this year, so we expect the revenue to go up at the pace of the additions of patients on therapy. So as I’ve talked about, we’ve had really consistent growth in patients on therapy, so that’s what’s going to drive the growth in Q3 and Q4 just as it’s done since launch.

And 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 and so 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. So we’re going to keep focusing as our number 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 — Chief Executive Officer

Charlie, I’ll add, 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 and what we heard from patients is, the first time they were aware that it was approved and available to them. And I think the more that we get going, Tazeen, I think that’s potential for continued growth. But the bottom line is there’s a lot of good drugs out there that people are controlled on. And so it’s tackling it, doctor by doctor, patient by patient to get them to want to try it because if it works for them, it’s way better than being injecting yourself.

Tazeen Ahmad — Bank of America Merrill Lynch — Analyst

OK, Jon. Thanks for that. And, 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?

Anthony Doyle — Chief Financial Officer

So I think what we’ve said before, we’ll say again on this, Tazeen, is you can draw a line between our year one revenue of about $122 million, $250 million last year and $320 million this year. And 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 Jon was just talking about. So, moving this market takes a while, but everything we see in our forward-looking market research as well as the results that we’re putting on the board gives us great confidence that we’re going to get there.

Jon Stonehouse — Chief Executive Officer

And that line crosses $1 billion around the turn of the decade. And remember we have patent protection out to 2039, so we’ve got almost another 10 years of protection at peak. So that’s real value.

Tazeen Ahmad — Bank of America Merrill Lynch — Analyst

Thank you.

Jon Stonehouse — Chief Executive Officer

Welcome.

Operator

Our next question comes from Chris Raymond with Piper Sandler. Please go ahead.

Unknown speaker

Good morning. This is Nicole [Inaudible] for Chris. Thanks for taking the question. Maybe just around the 10013 program, I know you guys are going to evaluate a higher dose and healthy volunteers.

I guess just any color around maybe how that translates to the dose and preclinical models where you observe the chronic toxic signal. And then just to clarify, I guess, have the chronic toxic experiments been completed at this point?

Helen Thackray — Chief Research and Development Officer

Yes. Good morning. So I’ll going to take those in reverse order. In terms of the chronic toxic, we had a chronic toxic program, it’s still ongoing and we don’t expect that to complete until later in the year.

In terms of the information and translating that to effect, what we really — what we know is from healthy volunteers where we see that the clinical the compliment 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 and P.A.N.H. to assess further information around complement inhibitions. At that end, and dose escalating as well as then how that translates into clinical outcomes, so that we can confirm the dose.

Jon Stonehouse — Chief Executive Officer

But 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 one today? So that’s the whole point behind that trial.

Unknown speaker

Yes. Got it. And then just really quick, I know the 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 situation has stabilized. So we are not losing more patients or having patients having to drop back to free product since the first quarter. Those that we did put on long-term free product in the first quarter have to stay on it for the rest of this year, but for now, the situation has stabilized.

Anthony Doyle — Chief Financial Officer

Yes, and I think it’s just made one big plus for Charlie and his team, despite that they’re making great traction or having great traction in converting patients from pre-product to paid as he said it was at 34% and now it’s down to 30% and my expectation, I think, Charlie as well is that that’s going to continue to go down.

Unknown speaker

Great. Thanks for the color.

Operator

Our next question comes from Stacy Ku with TD Cowen. Please go ahead.

Stacy Ku — TD Cowen — Analyst

Thanks so much for taking our questions. We have a few follow-ups. So first, regarding 10013 and additional cohort, was this a question from the FDA or just the next natural stop in your development for this program? And then regarding the potential range of doses for the global PNH study, willing to provide some details there. And I know you’ve discussed it in the next year, but their potential to get a sense of the safety profile any earlier.

So those are our questions on kind of the pipeline. And then regarding Orladeyo, I know you’ve, in the past, not discussed exactly the size of the Salesforce, but not even increasing in Q4. Could you just talk about the relative sizing versus other competitors like the Takeda you think about expanding potential efforts and maybe communities that and clinicians that really only treat to those patients? Thanks so much.

Jon Stonehouse — Chief Executive Officer

So, Helen, you want to take the 10013, and Charlie, you can take the salesforce.

Helen Thackray — Chief Research and Development Officer

Yes. So, 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 those are the entire PK model. We’ll need that once we have our patient data in order to confirm the final dose for pivotal trial initiation. And so that’s why we’re adding that dose level.

In terms of the range of doses in 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 PNH, in the population setting, we’ll be in critical outcomes like looking at hemoglobin and LCH.

Jon Stonehouse — Chief Executive Officer

And, 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. And how long do we need to follow those patients to get a sense of the safety, at least in the short study.

Helen Thackray — Chief Research and Development Officer

Yes. So that’s a small study. We don’t need many patients and that’s one of the reasons to assess a complement inhibitor in patients with PNH. You can dose escalate and we will be doing that within individual patients and each one 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.

So not very many patients, small trial. In terms of the safety information, we’ll be looking at that as we dose up as well. And so we’ll have, again, an individual patient, the ability to observe safety across the range of doses.

Jon Stonehouse — Chief Executive Officer

And three months, six months, 10 patients to 15 patients roughly.

Helen Thackray — Chief Research and Development Officer

Yes. It’s pretty small and it’s four to 12 weeks to have a first outcome.

Charlie Gayer — Chief Commercial Officer

And then on the sizing of the salesforce, what I’ve said before is that our teams right in the midpoint between 30 people and 50 people and isn’t the exact number, but at the beginning of the year, we did add a few salesforce territories. The biggest thing that we did is double the number of our regions. So it gave our regional managers, regional directors more time to spend with the 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.

And so we build it on a workload basis for each sales rep. So they can be efficient, but we also do look at what best we can tell what the competition’s doing. And we think that our team decides very comfortably to them.

Jon Stonehouse — Chief Executive Officer

And, Charlie, it’s not just the rep, right? What we hear from docs is that they see somebody from BioCryst, every week and so you might want to just talk about the whole team that —

Charlie Gayer — Chief Commercial Officer

So simultaneously, what we do is, we have, we have a market access team out in the field. So, we’ve built up that team. We’ve expanded our patient services team so that they work closely with patients, but also with the practices. And then, of course, on our medical side, we’ve got a very excellent medical team out there, working to educate physicians.

So, we look at the whole package and as we do our research, we get feedback that they’re seeing BioCryst people the most frequently.

Stacy Ku — TD Cowen — Analyst

Very helpful. Thank you.

Operator

Our next question comes from Brian Abrahams with RBC. Please go ahead.

Unknown speaker

Hi, everyone. This is Nevin on for Brian. Congrats again on a good quarter. So I have a couple questions about the efforts that you guys are taking to confer free drug patients to pay drug.

Can you talk about some of the efforts there in regards to patient education and the simplification of some of the paperwork that’s mentioned on previous calls? And then also, if you could speak to some of the gross to net trends in the quarter and some of the recovery into future quarters as well.

Charlie Gayer — Chief Commercial Officer

Sure. Yes. On the conversion from free drug to pay 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% and the number one thing, as you’re alluding to is making sure that we are working with customers to get all the complete paperwork. So what that means is for a new prescription coming in, that the start form is complete.

We’ve got the lab test. 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 insures changing their mind and 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 first quarter where 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. So gross to net was as bad as it’s ever going to be in Q1 and then it normalizes for the rest of the quarters.

Jon Stonehouse — Chief Executive Officer

Yes, and what we said in Q1 is it was up the higher end of that 15% to 20% range and we had expected that in Q2 would come into the lower end of that range and then maintain that thread the year and that’s exactly what we saw happen.

Unknown speaker

OK. Thank you. And then if I could also ask about the retention rates of patients were on the drug. You had mentioned that the same number of patients were dropped off by the higher denominator there.

And so what do — are those retention rates and in regards to the retention rates are they kind of the same in the U.S. and the ex-U.S. or are you seeing any differences in what those rates look like in those geographies?

Charlie Gayer — Chief Commercial Officer

Great question. So what we’re seeing at this point and we’ve got a lot of history now that gets us confidence in saying this is — that the pattern of discontinuation is very consistent. So when a patient starts in the U.S., a patient starts on therapy about 60% of them make it to one year and then we lose very few people after a year. And so what that means in the US market is every month as we’re getting a consistent number of patients coming on to product, we can predict how many people are going to drop off and our base is growing.

So 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 and we think a lot of that has to do with just 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 expect in those few — first few months of therapy and if they hit any bumps then they don’t panic and drop off therapy and we’ve seen that that has been very effective and I think that’s what we’ve got the stable pattern that we’re seeing now.

Unknown speaker

OK. Thank you all.

Operator

Our next question comes from Jon Wolleben with JMP Securities. Please go ahead.

Jon Wolleben — JMP Securities — Analyst

Good morning. Thanks for taking the questions. On the free drug dynamic, Charlie you mentioned a goal to get to at least 20% or less on free drug. I’m wondering when you think that could happen and then with the guidance for the second half of year with steady revenues between 3Q, 4Q, should we expect any movement on the free drug status in the back half of the year if you’re seeing steady patient and steady revenue seems like that should be stable, but why don’t you talk a little bit about those two most points?

Charlie Gayer — Chief Commercial Officer

Sure, Yes, so kind of the second question Yes, we expect to make just continued incremental progress in the second half of the year getting people to pay drug. It’ll contribute, but I think the patient growth is really what’s going to drive our sales growth in the second half of the year. As far as when do we expect to get to the 20% or better, it’s going to take a few years to get there, but the early — as we’re really focused on this what we’re seeing in the last few months is new patient starting on therapy are already getting to an 80% plus paid rate and so that gives us that confidence that over time we’re going to be able to get everyone there. So I think it’s the team focus, our patient services team our market access team, our sales team working to educate patients and healthcare providers about this and to continue to work with payers that all of that together is what’s making the difference.

Jon Wolleben — JMP Securities — Analyst

Got it. And ex-U.S. you mentioned things are going well. Wondering if we should expect to see an acceleration any point if there’s tipping point or this going to be grind higher as well there and maybe a little bit about if it’s going to be certain countries contributing the most or this going to be you know consistent geographic expansion driving the revenue ex-U.S.

Charlie Gayer — Chief Commercial Officer

Yes. I wouldn’t expect a tipping point or acceleration. We’re really seeing the same pattern of patient growth. As we’ve talked about it takes a good four patients ex-U.S.

to add up to one U.S. patient just from a revenue perspective. We will keep at so the steady patient growth is the number one thing we’ll keep adding countries. So we expect next year to launch in our way two of Europe.

So countries like Italy and Spain and Benelux. So we’ll have those continued additions to our revenue stream, but I wouldn’t expect a big inflection point steady growth.

Jon Wolleben — JMP Securities — Analyst

Thanks, Charlie. I appreciate the color.

Operator

Our next question comes from Justin Kim with Oppenheimer & Co. Please go ahead.

Justin Kim — Oppenheimer and Company — Analyst

Hi. Good morning. Thanks for taking our question. Maybe just a quick one first and then a commercial, I just think about the additional data being approved for PNH, can you just discuss how those results may inform again and whether you think the clinical bar might be lower in terms of the alternative pathway inhibition required, perhaps due to the nature of these or competitive bar there? And then maybe on the commercial front for Charlie, could you just update us on the mix of growths you’re observing, whether those patients being added are naive to prophylaxis or experience as well a coming from high prescribers versus slow volume prescribers.

Thanks.

Helen Thackray — Chief Research and Development Officer

Sure. So on the PNH question, what we need to understand next is the dose that gets us to efficacy. So we’re looking for a safe dose that is effective and that’s measured by both the effect on the conference 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 and 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 IGN and other diseases. And we’re — 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 of complement inhibition and we’re looking at that with one daily dosing.

Jon Stonehouse — Chief Executive Officer

And that’s what others have done in the field with alternative pathway inhibitors. So this is a new ground. And then on the patient and prescriber mix, Justin, again the story is consistent patterns. So still about 50% of the patients are coming from other prophylaxis products and the other 50% at least best we can tell we’re not recently on a prophylaxis product or we’re completely naive.

So it’s great to see that consistency. And then 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. And what’s great is that every quarter we’re seeing a very consistent number of new Orladeyo of prescribers being added. So we continue to go broader prescriber market and then deeper within existing prescribers.

Justin Kim — Oppenheimer and Company — Analyst

OK. Good. Thanks so much.

Operator

[Operator instructions] Our next question comes from Serge Belanger with Needham & Co. Please go ahead.

Serge Belanger — Needham and Company — Analyst

Hey, good morning. A lot of questions have been asked at this point. So maybe a couple around the HAEA Summit that was told recently, let me just talk about the level of awareness of Orladeyo within the patients that you met there and whether you’ve seen — you’ve experienced any tailwind from attending the meeting, maybe from additional enrolment in the quick start program.

Charlie Gayer — Chief Commercial Officer

Yes, Serge as Jon said earlier, we did — first of all, we had a big presence there and this was our first time attending since we’ve launched Orladeyo and so we had a booth there. We had two booths, both a branded and an unbranded booth. A lot of patient traffic coming through our booths, a lot of great conversations and it’s always a little frustrating, but what a patient says, oh, it’s this drug launched, but we did hear that. And so it’s great now they know Orladeyo is on the market and as we said, 1,200 patients and family members, they all left knowing that Orladeyo is on the market.

So 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 — they may have questions about Orladeyo. So we’ll see if we get a tailwind, but 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 just them getting together and it was a really great meeting.

Jon Stonehouse — Chief Executive Officer

I think it’s like the first of what I hope will be a bunch of patient meetings regionally. All that stuff stopped. It was COVID and so a certain state a certain part of the country, they gather and I think the other thing is people reconnected. It’s like watching a family reunion honestly and the word of mouth spread because we got an equal number of people that came up to and it’s like oh my God, Orladeyo has changed my life and let me explain you why.

And so when they’re talking to other patients about that, I think that’s going to be helpful too. And then the last piece was, the KOLs are there as well and it’s just a different dynamic at a patient meeting and when you go to the college meeting or quad AI. And so and we’re able to show up in a way that differentiates us maybe from our competition and I think it’s a chance to really reinforce and connect with the KOLs in a way that maybe it’s harder and in other settings. So it was fantastic.

Operator

Our next question comes from [Inaudible] with Barclays. Please go ahead.

Unknown speaker

Sorry, I think this is Tony on for Gena Wang. A quick question on kind of on 10013, what initial data would warrant, potentially further development and what could we maybe expect to see at R&D Day on this or even further new pipeline assets.

Helen Thackray — Chief Research and Development Officer

Yes, OK, so, with 10013 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 in clinical outcomes that we’re looking for in patients and we’re looking for that in a manner that’s also safe. So it’s 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 of which we’ve been making the decision to further invest and then state pivotal trials. In terms of R&D Day, we’ll update across the pipeline. Here we have a number of things that we’ve been working on and I am really excited and pleased with what’s been happening in the discovery in early programs in Birmingham and within the co company. So it’s some breadths and depths of the pipeline that we’ll be discussing there.

Jon Stonehouse — Chief Executive Officer

Yes. And then I double will there be any new information on 10013 at that point, this will be stuff you’ve not heard of before.

Unknown speaker

OK. Got it. Very helpful. And then I guess another quick one on Orladeyo launch and there has 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.

Jon Stonehouse — Chief Executive Officer

We’re really confident in the 320 number and based on what we’re seeing, I think that’s what you should expect for this year. So consistent patient growth, incremental progress on getting patients over the paid therapy and that same pattern that I described earlier about patient retention to get us to 310 and then the continued growth outside of the U.S. that’s what will get us to the 320.

Unknown speaker

Got it. Thank you. Very Helpful.

Operator

Our final question comes from Maury Raycroft with Jefferies. Please go ahead.

Unknown speaker

Hi. Good morning. This is Young for Maury. Thanks for taking our questions.

Congrats on a good quarter. I guess our first question is on the Q2 revenue growth. You’re saying for the rest of the year that revenue growth is going to be more steady. From last year we saw there was a bit of confounding factor from the force 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

So Q3 and Q4 will not be as big a jump in revenue as Q2 because Q2 is driven by the patient growth but also all the factors coming out of the Q1 reauthorization process. So as Anthony described in his comments, we should average about $85.5 million for the — a little bit less than that in Q3 a little bit more in Q4 to get to the 320. For the July 04, yes so July 04 was on a Tuesday this year. So there was a day or two of shipments that came into June and that was part of our expectation this year.

We saw that happened last year and so we built that into our plan and just as a reminder for everyone in the US we have a sole source specially pharmacy. So this is all based on individual patient demand and there are a lot of patients going away for the 4th of July holiday and so 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.

Unknown speaker

I see. Maybe just a quick one on C1 normal patients, we thought some data on Orladeyo successfully managing C1 normal patients earlier this year and the [Inaudible]. 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 etc.

Charlie Gayer — Chief Commercial Officer

Yes. We haven’t shared the number other than what you saw on that the [Inaudible] poster, in terms of the proportion of our business. But we do C1 normal patients. So I think all the prophylaxis products are seeing C1 normal patients.

These are patients who have really struggled for a number of years. It’s been — their diagnosis isn’t as clear cut as Type 1 and Type 2, and so they’ve looked for therapies that work and what we’re seeing for a lot of them is that Orladeyo is really helping them. And so we’re seeing consistent reduction in attack rates and patient reported attack rates. And from a retention perspective, we’re seeing just about as good retention with C1 normal patients as we are with Type 1 and Type 2 patients.

And so, you can expect more data from us on this in the future, but right now what we’re seeing is we’re very pleased in what we can help these patients.

Unknown speaker

Got it. Thanks so much. Congrats again.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

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

Jon Stonehouse — Chief Executive Officer

Charlie Gayer — Chief Commercial Officer

Helen Thackray — Chief Research and Development Officer

Anthony Doyle — Chief Financial Officer

Tazeen Ahmad — Bank of America Merrill Lynch — Analyst

Unknown speaker

Stacy Ku — TD Cowen — Analyst

Jon Wolleben — JMP Securities — Analyst

Justin Kim — Oppenheimer and Company — Analyst

Serge Belanger — Needham and Company — Analyst

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