BioCryst Pharmaceuticals, Inc. (BCRX) Q1 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the BioCryst First Quarter 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I’d now like to introduce your host for today’s conference, Rob Bennett, Vice President of Investor Relations. Please go ahead.

Good morning. Welcome to BioCryst first quarter 2016 corporate update and financial results conference call. Today’s press release and accompanying slides for this call are available on our website, www.biocryst.com. At this time, all participants are in a listen-only mode. We will open up the call later for your questions and instructions for queuing will be provided at that time. Joining me on the call today are Jon Stonehouse, Chief Executive Officer; Tom Staab, Chief Financial Officer; and Dr. Bill Sheridan, Chief Medical Officer. Before we begin, I’ll read a formal statement as shown on slide two, regarding risk factors associated with today’s call. Today’s conference call will contain forward-looking statements, including statements regarding future results, unaudited and forward-looking financial information and Company performance 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 of the future results performance expressed or implied in this presentation. You should not place undue reliance on the forward-looking statements. For additional information including important risk factors, please refer to BioCryst’s documents filed with the SEC, which can be found on our Company website. With that, I’ll turn the call over to Jon.

Thank you, Rob. Good morning and thanks for joining us today. Since our last earnings call, we’ve been focused on incorporating the learnings from OPuS-2 and then advancing our HAE programs in order to have results from trials of both our second generation molecule BCX7353 and the sold dosage of avoralstat, later this year. Let me start with 7353. Last year in a Phase 1 healthy volunteer trial, 7353 achieved drug levels at steady state above the target range for a full 24-hour dosing period, after a single dose. With this kind of profile, we believe we have a real shot at reaching our goal of bringing forward a conveniently dosed, highly effective, oral drug for HAE patients. The next important step in the program is to study 7353 in HAE patients in a study we refer to as APeX-1. The study protocol has been submitted to regulators, and we’re working on the other start up activities for the initiation of this trial. Our plan is to disclose the APeX-1 trial design to summer when we have dosed the first subject. We remain on track to report trial results at the end of 2016. After evaluating the results of OPuS-2, the bar for the solid dosage form of avoralstat has been raised. The goal is now to achieve exposures in most HAE patients that support both, twice daily dosing and meaningfully higher exposures. This is a challenge for a drug with low bioavailability, but for this program to continue, we must meet this goal. We are currently conducting a Phase 1 clinical pharmacology study in healthy volunteers, evaluating multiple formulations of avoralstat and expect to report results from this study, during the summer. Lastly, we continue to advance our broad spectrum antiviral BCX4430. We have completed the Phase 1 healthy volunteer study of the intramuscular route of administration of 4430 and expect to report out these results and initiate a Phase 1 study of the intravenous route of administration of 4430, later this year. We continue to get data that supports the broad spectrum activity of 4430 as well. In recent months through a collaboration with NIAID and Utah State University, 4430 was evaluated in animal model experiments against the Zika virus. Bill will share some of the details, but the results from this early research are encouraging. So, that’s it for my instruction. I will now turn it over to our Chief Medical Officer, Bill Sheridan. Bill?

Thanks, Jon. It’s pleasure to share some information from non-clinical research with our broad spectrum antiviral agent BCX4430, and these data are represented in slides four, five and six in the webcast. Just to set some context, I am sure everybody is aware of the evolving public health issues around the spreading Zika virus infection through the Americas and the tragedy in Brazil that’s unfolding with microcephaly in babies born to mothers who had Zika virus infection during pregnancy. There is a lot of attention being paid to this at the CDC and other public health agencies. So, we had the opportunity to collaborate with Dr. Julander at Utah State University in NIAID funded research with BCX4430 in an animal model that has been developed to study Zika virus infection. This model is in mice; and wild-type mice can’t be used here because they’re resistant to infection and don’t become ill. So, the type of mice that are used lack critical elements of the immune system, in particular the interferon alpha, beta and gamma receptors, and they then become susceptible to Zika virus and develop severe illness. This is a very critical model. And as you can see in slide four, the controls, developed illness and then succumb and die in a relatively rapid timeframe. So, the first experiment was simply to address whether administering BCX4430 would improve survival, and that is indeed the case, couple of different dose regimens are tested. And is obvious from the curve, there is a statistically significant and meaningful improvement in survival with seven out of eight at the top dose, surviving through 28 days, and dramatic prolongation at median survival in the low dose group as well. Along with that, there was -- those who had a reduction in viral load as indicated in the right hand panel which is exactly what you’d expect to see with the direct acting anti-viral agent that also is associated with the improved survival in this type of animal model. So, this experiment was extended. And on slide five important question to ask is did the survivors develop immunity to the virus and when you challenge them again with another inoculation, what happens. So, this is a straight forward experiment. The seven survivors were challenged again with an injection of Zika virus on day 28, and these mice remained well with no such illness and continued well through the end of the study. In comparison, animals had never previously been exposed to the virus at the start of the experiment that instead had sham injections and either received vehicle placebo or study drug for eight days and then subsequently were challenged [ph] on day 28, of course developed infection and succumbed in the way discussed on the previous slide. This tells us that administration of the drug does not interfere with the development of permanent immunity against Zika virus, and that’s an important finding. An additional experiment has since been conducted illustrated on slide 6 that stops to ask the question, can the drug intervene and produce the useful outcome after the illness has had time to develop. The experiments I’ve described so far started administration of drug before virus challenge a few hours later. In contrast, the experiment on slide six starts drug administration one day after or three or five or seven days after administration of the virus and as you can see from the survival curves and indicated in the asterisks, there are meaningful and important improvements in survival when the study drug is delayed all the way through seven days. So, these experiments should be viewed as interesting and preliminary screening experiments in the very first animal model of Zika virus infection. And we’re encouraged by these findings and we’ll continue to collaborate with external experts around Zika virus and to see whether or not BCX4430 might have a role to play in the public health response to this important emerging infection. A couple of comments on the completed Phase 1 study that Jon mentioned. The study went through all of the planned cohorts of single doses and multiple doses. And the top line findings are that BCX4430 up to 10 milligrams per kilogram once a day for seven days in healthy subjects is safe and well-tolerated when given by intramuscular injection and with dose proportional pharmacokinetics that are straight forward. We look forward to sharing more detailed results later in the year. In the meantime, the program is moving forward as planned with completion of non-clinical work to support filing in intravenous route IND, so that we can study the drug using that group. So I’ll now turn the call over to Tom who’ll address the financial update.

Thank you, Bill. And good morning, everyone. I am pleased to report the details of our first quarter 2016 financial results. We closed the quarter with approximately $79 million in cash and investments, and have focused our first quarter efforts on achieving two near-term decision points in our HAE programs. First, we are striving to reformulate avoralstat to achieve twice daily oral dosing with meaningfully higher plasma concentrations in those observed in the soft gel formulation used in OPuS-2. And second, we are working to initiate the APeX-1 clinical trial, which will be the first clinical trial of BCX7353 in HAE patients. On slide seen, our revenue for the first quarter of 2016 decreased to $4.8 million from $6.8 million recorded in the first quarter of 2015. The decrease was primarily due to lower collaborative revenue associated with BCX4430 under our advanced development contract with BARDA and to a more limited extent, recognition of no RAPIVAB product sales in 2016. With the completion of the Seqirus out-licensing, all RAPIVAB commercialization activities and the recognition of product sales is the responsibility of Seqirus. Thus, we will not have any RAPIVAB commercialization expenses, nor record product revenue in the future. We will simply collect the royalty on a quarterly basis. First quarter 2016 R&D expenses increased to $20.6 million from $17.1 million incurred in first quarter of 2015. This increase resulted primarily from higher development costs associated with the Company’s HAE programs as well as ongoing RAPIVAB post-approval clinical trials in pediatric and elderly high-risk influenza patients. Enrollment in these trials has occurred much quicker than we originally anticipated and consequently, we have incurred slightly higher expense due to exceeding forecasted enrollment targets. As a remainder, BioCryst is solely responsible for the completion and funding of these post-approval RAPIVAB trials. General and administrative expenses for the first quarter of 2016 decreased to $3.2 million as compared to $4.1 million for the first quarter of 2015. The decrease was due to a reduction in unrestricted HAE grants, and the elimination of RAPIVAB marketing and commercial consulting expense in 2016, as RAPIVAB is now being commercialized by Seqirus. Moving below the operating line, we incurred $1.5 million of interest expense in the first quarter of 2016 compared to $1.3 million in the first quarter of 2015. We also recorded a mark-to-market foreign currency loss of $2.8 million on the Company’s foreign currency hedge in the first quarter of 2016, as compared to a foreign currency gain of $464,000 in the first quarter of 2015. Accordingly, the devaluation of the dollar to the yen had a $3.2 million negative impact in our first quarter 2016 results, as compared to the first quarter of 2015. The mark-to-market loss and gain result from periodic changes in the relative U.S. dollar, Japanese yen exchange rate and the related valuation of our hedge arrangement. Our net loss in the first quarter of 2016 was $22.8 million or $0.31 per share as compared to a net loss of $15.2 million, or $0.21 per share in the first quarter of 2015. Moving on to slide eight, our cash balance was $78.9 million at March 31, 2016, and we utilized $22.4 million of cash in the first quarter of 2016. We have sufficient cash resources to allow us to reach our two HAE decision points. And we forecast our cash and investment balance to provide liquidity through mid-2017. Typically, the first quarter represents a heavy utilization of cash as compared to the following three quarters in a fiscal year. This phenomenon is certainly the case of 2016 and results from the completion of OPuS-2 in the first quarter. Furthermore, when comparing the quarters, the first quarter cash utilization in 2015 was unusually low due to approximately $7.4 million of receivables collected from our distributors associated with the launch stocking of RAPIVAB. In regards to our 2016 forecasted results, we expect to remain within our previous expectations with our cash utilization in the range of $55 million to $75 million and our operating expense in the range of $78 million to $98 million. Both ranges were provided previously in February in conjunction with the reporting of our fiscal 2015 results. As a remainder, our operating expense guidance excludes equity-based compensation. And our cash utilization cash forecast excludes any impact of foreign currency fluctuations or other royalty monetization cash flow. Now, I’d like to turn the call back over to Jon for his closing remarks.

Thanks, Tom. That completes our review of the first quarter. So, looking ahead, we are focused on advancing our HAE programs to get closer to our goal of bringing forward a conveniently dosed, highly effective oral drug for HAE patients. You can see on slide nine that the two important milestones are results from the solid dose PK study of avoralstat this summer, and APeX-1 results by the end of the year. With that, we will now open it up for your questions.

Thank you. [Operator Instructions] Our first question comes from the line of Brian Abrahams with Jefferies. Your line is open.

I’m just curious if you guys have learned kind of as the months have gone on with their additional analyses, anything more about the OPuS-2 data and how you might apply your learnings to the APeX-1 design? In particular, I’m curious if there maybe signals of what the best way to offset the high placebo effects you saw in the OPuS-2 trial might be with your modification of the end points, looking at additional end points, changing things like trial size, might helpful for come that for APeX-1?

So, the additional analyses concerned to what we already said, which is the main reason for the outcome of storing OPuS-2 was exposure profile that we shared at the time we looked at that data. So that is a problem that BCX7353 already faces, given its exposure profile in healthy subjects. There is no reason to believe that they would be substantially different in HAE patients. And from that perspective, we would expect no change in what we talked before in terms of dose selection to 7353 in the APeX-1 study. So, we previously guided that the dose range we’re looking at is in general ballpark of 100 milligrams a day to 350 milligrams a day, so that doesn’t change. The second learning was to do with placebo effect, as you mentioned, and that is not by self a reason not just to take the drug effect; that needs to be into account especially with power calculations and sample size calculations. And we’ve done that. And the short answer is that that’s a typical way of dealing with placebo effect is to increase sample size. And another related aspect of that in making sure that you have the opportunity to measure a drug effect is catering the inclusion and exclusion criteria around the types patients we’re recruiting, so that they are well-established patients with non-attack rates in an appropriate range for the duration of the study, so that we can actually a drug effect. That wasn’t a problem in OPuS-2 that the same sort of care and attention that is needed to getting the right patients on the study is of course required for APeX-1. There is a trend [ph] I think.

And then, Brian, I’d add to that for the solid dosage form of avoralstat, it’s clear to us from the OPuS-2 results that three times a day dosing is not going to cut, and having a drug that falls for some portion of the dosing interval below the target range doesn’t cut it either. And so, we raised the bar. And what we’re expecting to get in order to move forward was a solid dosage form of avoralstat. So, it’s got to only be twice a day but it’s got to have a meaningfully higher exposure during the dosing interval.

Got it. And then just one more related question. I am wondering if there might be ways to more fully flush out some of the inter-attack [ph] benefits that you saw or the hints of inter-attack [ph] benefits you saw in OPuS-2 in the upcoming APeX-1 study and what that might mean for the future development of 7353, if you’re be able to replicate or even augment some of those benefits beyond, just attack reduction?

Right. So thanks for the question. And what you’re referring to quality of life benefits and the data from both inter-attack [ph] OPuS-1 and OPuS-2 within the same direction and is clinically significant magnitude. So, the improvement in quality of life I think is extremely important in patients with chronic illnesses. And the basic research in this field has been important in creating instruments that we can use that has been developed that are more specific for patients with hereditary angioedema compared to general 200 instruments that we’re using those in our studies. They will be in APeX-1. And we look forward to understanding the impact on how people live their lives as having the contact activation system and kallikrein controlled adequately around clock. And our expectation is there is a very profound benefit in controlling the illness. And we’re very encouraged by the results of the quality of life metrics in OPuS-1 and OPuS-2 that they could also be a chronic element to the sort of independent of acute attacks. So, I think that that research is important to do. And we will be certain to collect those metrics and report them.

Thank you. Our next comes from the line of Jessica Fye of JP Morgan. Your line is open.

As we think about Zika, given that people I think often don’t know that they have it or asymptomatic, are you presumably thinking about your drug being used in more serious cases. And it also seems like greatest implications are in pregnancy. So, you have preclinical tox data supporting a lack of teratogenicity. And for RAPIVAB, I think there is new leadership of BARDA with Richard Hatchett as acting Director. Can you talk about your latest thinking on a potential stockpiling order for RAPIVAB? It seems like that could be a nice means to improve the Company’s cash position?

So, I’ll take the Zika virus question. Thanks, Jessica. So, I think if you put yourselves in a shoes of a public health physician, who need to respond through emerging viral threats and specially one that’s transmitted by an insect vector like a mosquito, the number one thing you worry about is vector control; the number two thing you worry about is vaccine; and the number three thing, you about and would like to have in your pocket as an antiviral drug to treat people who need an antiviral drug. So, I think your questions are very good one, good one, they can’t be answered right now because we don’t understand enough about the natural history of the infection. And recently there was desk report in the U.S. of an elderly person who got acute Zika virus infection, for example. The questions about use of any drug in pregnancy, you always have to approach with a lot of caution. With regard to what we currently know, this drug is negative in in vitro genotoxicity testing, and we have not yet performed reproductive safety testing in non-clinical spaces; that will be done. And clearly, we would have to have that result before even considering using a drug like this in a pregnant woman. So, I think there is a lot of work to do. The main point that I would draw from the from the research we presented today is that yes, more evidence, the broad spectrum, potential utility BCX4430 and having a drug in a national stockpile for using emerging infection is way more attractive is as broad spectrum utility rather than being specific to just one virus.

So with regard to stockpiling of RAPIVAB, yes, there has been a change in leadership at BARDA. With approved drugs though, the stockpiling is controlled by the CDC, not BARDA. And we’ve been in conversations with CDC; we’ll continue to have conversations with CDC about the potential stockpiling of RAPIVAB. And in election year, I am not super confident that the money will be available, and that’s always an element of this. But, I am also confident that at some point, they’ve got to replenish the existing stockpile that they have. And so, like you said that capital could be meaningful to us and we’re continuing to work on it, but we’re working with the government and the money’s got to be available.

And maybe on your next step, [ph] what’s the next step in Japan for 7353?

So, the next step in Japan is to get APeX-1 done, and that study is being done in Europe, and then get the results because that will frame up the necessary discussion with the Japanese regulators about the remaining steps required for development and licensor of 7353 in Japan.

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

I wanted to ask a question on 7353 and APeX-1. I know that Brian was asking this question as well. But I guess I’d like to hear more about the trial design. It seems like perhaps in the summer we’ll get more information. But, I am wondering if you could give us a little bit more color on it, so we can age the probability of getting to results by year-end. Are you confident and patient size, or is it being -- or patient numbers, or is it being conducted et cetera?

We can frame it up in general terms and once the study actually starts then we can go into much more detail. If you look at the history of filed, we now have examples of studies of different general designs. They’re all placebo controlled. And prophylaxis studies in the past, before there were any effective therapies used a crossover design that was a design of OPuS-1. OPuS-2 was a parallel cohort design and in fact we’re encouraged by regulators to pursue that type of design. The change from crossover to placebo, you need to adjust by having a proportional increase in sample size because you’re now looking at variances in populations rather than within patient variances as part of the statistics behind the power calculations. So, the studies can be done either way. And I note that one of our competitors is also doing a parallel cohort study. So, there are pluses and minuses for both of those. There is no reason to discount either one. And you can -- provided you do these correctly and get the exposure you need and measuring the right outcomes in the right patient population, then they’re both fine. So, I think the next question is with regard to dose ranging. So, dose ranging is necessary here, because although we have very good assay and a very good handle on how much BCX7353 would need to be in the plasma to replicate the normal range of C1 inhibitor, nevertheless, you have to make sure the outcomes to fully correlate the PK with the pharmacodynamic effect that you really want. So, dose ranging is important and will be an element of the study. And typically, that’s done with say three doses at the stage of drug development, and out of that you would like to select one or most two doses to go into pivotal program. The duration is dictated by practical considerations and how much toxicology experience you have. And there is also an element of expense and drug supply. And as you recall we did perfectly successful experiment with the four-week duration study in OPuS-1. So, you can do short experiments here and get the information you need. And actually that’s much better to do dose ranging on the short experiment than in the long experiment. So, I think they are the general things. There are interesting ways of getting information from ongoing studies that have to do with interim analyses of course. It’s a well described and well used tactic in conducting clinical trials, and that’s certainly on the table. So, I think all of these things are part of the discussion around the design of APeX-1. With regard to sample size, you don’t want to be in a position of having to recruit and patients to answer your questions. And if it is like this then we certainly don’t need that. So it will be a reasonable sample size. We can expect that to be the case even taking into account placebo effect.

Yes. So, if you add all that stuff together, Charles, just a basis of your question is what’s our confidence level in finishing the study by the end of the year? From what we can see today, our confidence level is pretty high, but we will have greater degree of confidence when we get the first patient dosed and have a protocol agreed upon and all that

And the study will be conducted, where, here…

Europe.

Several countries in Europe. It has -- for the same reasons that we conducted our first study with avoralstat in HAE patients in Europe, there is a concentration of patients in centers of excellence and that just makes it whole lot easier to manage, especially in smaller studies.

Productivity, per se is a lot better.

That makes sense. So, it’s sound like complete the study this year and data -- top line data early…

As we’re saying we’ll put out the data by the end of the year.

We’re [indiscernible] reporting side, we want to report that about end of the year.

And then, just moving to 4430 and Zika, I know that this is way in the realm of speculation, Bill, but could you help us understand the mouse model in terms of how it may correlate with the time course of the human disease and infection et cetera at clinical, I’m just wondering about the dose response and the time if it makes sense.

It’s a great question. I think the natural history of this disease is still being explored, so there is a lot still to be learned by the medical community about Zika virus infection. I think it’s fair to say that at the moment, there can be subclinical infection, where people feel perfectly fine, and you only know that they’ve being infected with Zika virus when antibody [ph] studies. So, we know that’s the case from the studies in French Polynesia for example, with serology surveys of the population. And we also know that if mosquitoes aren’t controlled, vast majority of the population gets infected with Zika virus which spreads through the community. So, there can be some clinical infection. And if you’re not getting ill with the infection and you’re not a pregnant woman, then it’s probable that you don’t need any intervention. Then there are people who get ill with the infection, and that I’m sure that can vary from a mild flu like illness with a rash, although way up to a most severe illness with arthritis and high fevers and so on. So, I think that’s where the information is starting to be a bit thinner. And do we know that the typical case of Zika virus infection is clinically evident. We’ll have symptoms of acute arthritis and a rash, in addition to a fever. And it’s a self-limiting illness. And I don’t know whether an antiviral would be useful for those patients yet or not. In animals, so, the general course of the disease is pretty quick. In animal, the general course of the disease is pretty quick. And so, the duration of viremia that Dr. Julander shared at some of his public presentations in his model, it’s only a few days long, sort of very high tide of this virus, so lots of virus proliferation in normal animal. So, immune system kicks in and then clears the virus and creates immunity. So, the biggest medical need, there are two medical needs that still stand out. One is the issue to do with microcephaly and teratogenicity of virus infection in fetuses. And that’s going to be definitely we’re thinking about and after we’ve got the -- non-clinical safety study is done and reproductive safety study is done. The other thing that’s pretty interesting here is just the severity of the Guillain-Barré syndrome. That’s the neurological complication that is an immune complication of recovery in this virus infection. And of course, if you don’t get the virus infection at the first place, then you are not at risk. So, I don’t know, whether antiviral would be useful in preventing that, if it was administered during the virus infection, it might be but mosquito control and vaccine, as I said before, are going to be top of the agenda for the public health agencies. There may be a role for antiviral drugs that needs to be determined.

I think another important point in all of this is that when governments react to specific prices, they’re always playing catch-up, whether it’s a vaccine development, vector control whatever. And what’s encourages me in the discussions we’ve had with the U.S. government bodies is that the idea of having a broad spectrum of antiviral that works on multiple viruses, seems to be pretty important and we’re continuing to get the funding. So, what application we’ll have with Zika, Bill and I can’t predict at this point in time. We’ll continue to work with the government to do the studies we need to do, but need for a broad spectrum antiviral, it’s just so important. And we’ve shown in Ebola, Marburg, yellow fever, Zika, animal models, survival benefit and this looks like a good candidate to us.

The other thing I forgot to mention is, there are three ways of using antiviral for these things and one is to treat established infection, the second is to treat somebody who is not yet ill but is known to be exposed and that’s post exposure prophylaxis, the third is pre-exposure prophylaxis. So, I would say that the mass experiments that I shared today, especially the first one indicates that this is likely to be highly effective in -- if administered very early after viral infection that’s post exposure prophylaxis. So, it’s early days, both in the medical understanding of this disease and being how antiviral might be used. So, I think that we’re encouraged by the fact that drug has activity, we’ll continue to work with the experts to figure out whether it’s good to have clinical utility or not.

It sounds like that broad spectrum component or feature of 4430 is really what is intriguing, not only for this infection but others that could come along.

That’s right. The development pathway hasn’t changed. So, we’re continuing down the animal rule pathway for a development of this drug in Ebola virus infection which is a lethal disease and huge unmet medical need. There has been Ebola outbreak at one sort of or another in Africa every year for the last 10 years. Everybody knows the big one but the virus is never going to go away; it’s always going to be a risk. And it’s a disaster obviously where there is an outbreak of Ebola virus. So, we have something like $75 million worth of funding in total contract value for NIAID and BARDA. And as I mentioned previously on the call, we’re continuing to get through the necessary research to develop that drug for Ebola virus infection.

I was going to ask another question regarding that but I think we’ll take that offline. I wanted to ask one final question, quick one of Tom and that is regarding the assumptions behind cash burn, both revenue anticipated at this either from RAPIVAB or other milestone payments whatever? And then also avoralstat expenses, what you’d be assuming in the second half of the year?

Sure, Charles. So I’ll preface my comments by saying generally when we’re forecasting our expenses and our cash burn, we take a very conservative tact, which is we assume a sort of a maximum outflow and a very limited inflow. And so, what I can tell you is we forecasted and what’s in our ranges is that we continue the avoralstat development and the 7353 development through the pivotal points, which effectively go through the summer and the end of the year, and assume success in taking the next step and continuing those on. And so I think what you see in our expectations is not only are we continuing those programs but we’re also continuing to fund our other programs, our earlier development stuff as well. And so, we have taken our history over the last five years and said, we have enough cash to take all of our programs to the next stage gate, put that card, see if it’s good, and if it is be prepared to move forward with each program. That mentality is not changed for ‘16. In regards to cash coming in, we’ve once again taken a very conservative view on that. And the only cash coming in is associated with our existing government contracts and the options within those contracts. So, my final comment would be in the last five years, I think we’ve only adjusted our annual guidance once, and that was last year, and it was adjusted multiple times downward. So, I think that when you look at our cash projections based on our history, I would think that they would be considered conservative. And as soon as we seem to deviate from that, we will let you know. But I think it’s unlikely that we will.

Just to clarify, the guidance was adjusted downwards in terms of burn last year and that could happen this year, it sounds like if avoralstat didn’t move forward?

So, certainly, as soon as we have information that would cause us to increase or decrease activities and it’s mainly probably decreasing activities where we bring cash in, then, we will adjust our results, certainly in the next quarterly update or our forecast.

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

Can you perhaps talk about what your expectations are for this upcoming next data appointment here; what level of sort of exposure, and what does the PK look like, really feel like this got a good shot and I am just trying to understand how to interpret the data when it comes out relative to what we’ve seen so far? Thank you.

So, if you remember the slide that we show PK for either 7353 or avoralstat, there is a target range, and there is a blue bar, horizontal bar that represents 4 to 8 times the EC50. And the reason we chose those is it’s what it takes to get HAE patients to the lower limit of normal where we believe they could be attack free or near attack free. And so, the bottom edge is the average HAE patient because some patients have some residual C1 inhibitor and the top edge is patient that has nothing, so zero gas in the tank. And so given what we learned from Opus-2 where a three times a day dose actually dropped below that lower edge of the bar of the four times EC50 towards the tail-end of the dosing interval, and you had to get three doses and you had to get them in a timely manner, that just doesn’t fly. And so, twice a day with that drop and below would be problematic too. So, what we’re really shooting for is a 24-hour -- or a 12-hour curve, excuse me, where the drug levels at steady state stay in the blue bar range or above for the dosing interval. And we think that by dropping the dose, so making a twice a day which is just easier to remember and take it when you get up, take it before you go to bed, and then having that coverage will give us a much better shot at this, conveniently dosed, highly effective parts, the most important part here.

Thank you. [Operator Instructions] Our next question comes from the line of Kumar Raja with Noble Life Science Partners. Your line is open.

So, earlier you had mentioned that for filing, you will need a 6 to 12 months dosing. And can you guys dose APeX-1 patients long-term and can that be used for this requirement? And also this requirement, is it just from FDA or this requirement from other regulators like EMA and so Japanese authorities also?

And the question in short is, is there a requirement for long-term safety for a drug -- for prophylaxis for hereditary angioedema. And because you anticipate that if it’s a safe and well tolerated drug that you guys take it lifelong or at least for very long periods of time, yes there is a requirement for long term safety. And the details might vary a little bit between one regulatory region and another in terms of exactly how many subjects or how many months of observations but the general theme is the same. So, you would want the majority of subjects in the long-term safety study to be at least through six months and to have some experience of 12 months administration. I think that the other aspect of this that will play into guidance for regulators is what is the safety profile of the drug in that particular case that you have already developed in the studies that you have under your belt at the time you have that conversation. So a drug that has the clean safety profile in the clinic and nothing coming out of long-term non-clinical safety that is of concern, you would expect to have a reasonable expanded type of requirement, if there are specific issues that regulators would want you to address that in the long-term safety study.

And now for Shire Phase 3 is ongoing, how do you think that’s going to impact enrollment in the APeX-1 trial?

So, whether it’s Shire or some other company, there is always competition for clinical trial subjects, especially in rare diseases but even in the common diseases. And that’s a reflection of what’s the medical need and how many things are in development at particular time. So, our attitude is it’s always difficult to recruit subject studies and we always go after sites to do a greater job who are enthusiastic about our programs. So, we certainly had no lack of enthusiasm but we try to anticipate competition from other sponsors working in the same field. And at the end of the day, we will get the study done.

Yes, and I’ll just add, probably one of the nicest surprises coming out after the Opus-2 results was the outpouring from the patient community and the physicians who treat HAE, just with words of encouragement. There is a huge, huge desire for an oral therapy here. And we see it every time we go to the patient meetings, we’re going to one in Europe, the international meeting later this month and we expect that we’ll get a bunch of enthusiasm for our program. If your question was around will Shire have to do long-term safety? The answer is yes. I am pretty sure they’ve even said publicly that they’ll think to do a rollover from there. So, I think anybody, as Bill said that’s going to be treating chronically for prophylaxis, it’s going to need to demonstrate long-term safety and do the 6 to 12 months dosing.

Thank you. And I am showing no further questions at this time. I’d like to turn the call back over to Jon Stonehouse, CEO, for any closing remarks.

Thank you. So, as we said in the prepared remarks, really our focus has been on learning as much as we can from the previous studies we’ve done, so that we give the studies that are coming their best shot at success of reaching our goal of getting to a conveniently dosed highly effective oral drug. So, we’re in that position now or either in a study or hopefully about to initiate a study, and we’ll have results later in the year and we’ll keep you updated. So, as always, we appreciate your interest in our Company. And have a great day. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone have a great day.