Good day, ladies and gentlemen. And welcome to the BioCryst Pharmaceuticals Incorporated Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time [Operator Instructions]. As a reminder, this call is being recorded. I would now like to turn the conference over to your host for today Tom Staab, Chief Financial Officer. You may begin.

Thank you, Sonya. Good morning, and welcome to BioCryst's fourth quarter and full year 2017 corporate update and financial results conference call. Today's press release and accompanying slides are available on our Web site. Participating on the call with me today are Jon Stonehouse, Chief Executive Officer and Dr. Bill Sheridan, Chief Medical Officer. Following our formal remarks, we will answer your questions. Before we begin, I'd like to direct your attention to slide two, which discusses our use of forward-looking statements and potential risk factors regarding an investment in BioCryst. As detailed on the slide, 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 Web site. In addition, if you’re looking for the S-4 joint proxy statement, it is under Novelist Hold Co. Inc on the SEC Web site. Now, I would like to turn the call over to Jon.

Thanks, Tom and good morning, and thanks to all of you for joining us today. Let me begin with a few highlights from our development pipeline, and then I will turn the call to back to Tom to review our fourth quarter financials. Following Tom's remarks, I will discuss some additional details about our previously announced merger with Idera and our CMO, Bill Sheridan, will discuss why we are so excited about Idera's pipeline, especially IMO-2125, as well as the opportunities for synergy created by combining our discovery engine with Idera's. 2017 was a year of significant progress for BioCryst, and we have gotten off to a strong start in 2018. We are focused on moving our programs forward and hitting our timelines. We also announced our plans to merger with Idera, which will accelerate the strategic initiatives of both organizations and will immediately form a substantial and differentiated biotech company, one that is serving patients in the rare disease community and is well positioned to generate enhanced value for shareholders. APeX-1 data represented a significant milestone for BioCryst and since then, we continue to move full-steam ahead on BCX7353. We are screening patients and remain on track to initiate our Phase 3 trial APeX-2 this quarter with the goal to report top line results in the first half of 2019. We also are screening patients and expect to initiate our long-term safety study of 7353 APeX as this quarter. We continue to enroll patients into the Zenith-1 trial, which will study in oral liquid formulation of 7353 for alleviating acute HAE attacks, potentially providing better solutions for the entire HAE treatment spectrum. Enrollment has exceeded our expectations since the fall as we have fully enrolled the 750 milligram cohort with 36 patients and are currently enrolling patients in the 500 milligram cohort. On average from the patients enrolled thus far, it takes four months for patients to complete having three treated attacks. But there is a wide variation from patient-to-patient and this affects the time to completing a cohort and completing the trial. We expect to report out data on efficacy, safety and tolerability from the 750 milligram cohort in the second half of this year. We are also extremely excited about our new program to treat Fibrodysplasia Ossificans Progressiva or FOP. FOP is a devastating disease that results in the loss of function, deformities and as it progresses to severe disabilities in early death. As an ultra rare disease with no currently approved treatments available, FOP is a logical and strategic fit for BioCryst. The program which came out of our own discovery platform is currently in pre-clinical development and we expect to initiate Phase-1 clinical trials in the first half of 2019. With that update, now let me turn it over to Tom.

Thank you, Jon. I am pleased to report our fourth quarter financial results. And as Jon said a very successful beginning to fiscal 2018. We began 2018 with $159 million in cash and investments after two successful capital raises in 2017. This balance provides us cash runway sufficient to achieve APeX-2 results, which are projected to be available by mid-2019. In addition this January, we announced completion of a definitive merger agreement with Idera Pharmaceuticals, a combination that creates a larger and stronger orphan disease focused company with significant expertise and substantial value. Our fourth quarter 2017 results are presented on slide 12. Starting with revenue, you see that total revenues for the fourth quarter of 2017 decreased to $3.9 million from $9 million in the fourth quarter of 2016. The decrease resulted from the lower collaborative revenue in 2017, accompanied by a lack of product sales associated with the sale of peramivir inventory to our partners. These inventory sales occurred in the fourth quarter of 2016 and total $2.3 million, but did not recur in 2017. Fourth quarter 2017 R&D expenses increased to $16.9 million from $12.2 million in the fourth quarter of 2016. This increase was primarily due to additions in our R&D employee ranks in preparation of our Phase 3 APeX-2 trial and our APeX-S long-term safety trial as we entered the last stage of development in our prophy program. In addition, we incurred higher spending on the Company's AJE portfolio of compounds, including the ongoing proof of concept Zenith-1 trial. General and administrative expenses were $4.7 million in the fourth quarter of 2017, an increase from $2.6 million in the fourth quarter of 2016. The increase in G&A expense is largely due to an increase in business development and merger-related costs. Moving below the operating line,…

Thanks, Tom. Moving on to the announced merger with Idera. This morning we filed our preliminary joint proxy statement perspectives in connection with the merger, as well as an updated investor presentation outlining the benefits of the transaction. I encourage you all to read the proxy statement and review our presentation. After carefully evaluating a range of strategies to enhance shareholder value over roughly a two year period, which is detailed in the background section of the proxy statement, our board determined that combination with Idera was compelling from both a strategic and financial perspective. We have a highly experienced Board of Directors who are well respected for both their operational and strategic experience in the Biopharma sector, and the Board with the assistance of BioCryst management and independent financial and legal advisors, determined a merger with Idera makes strong strategic sense and enhances shareholder value. Combining with Idera will position us to accelerate our strategic initiatives, expand disease targets and deliver life changing therapies to more patients suffering from rate diseases. The merger provides compelling upside opportunity to BioCryst shareholders by leveraging both companies diverse late stage product pipelines, advance discovery platforms and complimentary expertise in rare diseases. Together, the combined company will have a robust late state pipeline with two highly attractive Phase 3 assets and two promising Phase 2 assets. The merger is also synergistic in terms of cost, as well as the enhanced development opportunities resulting from the combination of our discovery engines. This deal creates meaningful opportunities for operational cost savings, multiple near term sources of non-dilutive capital and new opportunities to expand the portfolio’s market potential and to maximize shareholder value creation. Now, I would like to turn the call over to our CMO, Bill Sheridan. He will cover two key topics. First, what we learned during the evaluation of Idera and why we believe IMO 2125 has affirmed scientific foundation and impressive clinical data. And second, the potential opportunities that we believe will arise from combining our structure guided small molecule discovery platform with Idera's nucleic acid and oligonucleotide chemistry discovery platform. After Bill finishes, I will come back to talk further about operational cost synergies, capital implications and maximizing shareholder value. With that, I'll turn it over to Bill.

Thanks, Jon. I'm excited by the opportunity that combining our companies will bring to patients with deadly and rare diseases. When I practiced medicine as a hematologist and oncologist, my area of research was bone marrow transplantation. In those days, about 30 years ago, the graft-versus-leukemia effect was the only immune-oncology treatment that existed in and in fact even the term immune-oncology was not yet in use. At that time, it was hard to see have the ability of the immune system to treat cancer could be made more broadly applicable and I was been in the campus immuno-oncology scripting. With that background to assist Idera TLR agonist project, we thoroughly reviewed the Phase 1/2 trial data of intratumoural IMO-2125 in combination with a systemic checkpoint inhibitor in patients with metastatic melanoma who had failed the prior checkpoint inhibitor treatment. We reached out to independent experts in melanoma treatment and translational medicine to help us with this review. What we found was an impressive response rate five out of 10 or 50% for ipilimumab 2125 at its recommended Phase 3 dose of 8 milligrams. These responses included its relations and very importantly abscopal effect on distant relations that were not injected with 2125. Once subject has had a complete response that has persisted throughout the two years. One other subject who had failed prior ipilimumab treatment also achieved the response on 2125 plus EP. But even if you look at the most conservative view and included all the doses assisting the Phase 1/2 trial, we still saw a clinically meaningful overall response rate of [5016] with 29% of the valuable subjects in [EP+] 2125, which is more than double the 13% reported for ipilimumab alone. The key part of our assessment with the evaluation of the translational medicine evidence that…

Thanks, Bill. Let me provide a bit more detail on the financial side. We expect to realize approximately $20 million in cash synergies in year two and a total of $30 million in year three of annual pretax cost synergies after closing. This will largely come from consolidating facilities and other expense savings, providing the combined company with increased financial strength and flexibility. The company will be capitalized with a net pro forma at December 31, 2017 cash balance of approximately $243 million to fund internal clinical development, discovery research and commercial launch preparation efforts. The combined company will have a cash runway into the third quarter of 2019, and we could extend it longer by renegotiating our debt, cash from in the money warrants and multiple opportunities for non-dilutive capital through government stock piling and new partnering arrangements. For all these reasons we outline when we announced the transaction and reiterated today, I am confident this merger will position the combined company to serve more patients by expanding opportunities for a successful product development and commercialization, can create sustainable shareholder value well beyond what we could achieve as a standalone company. In summary, the combination of BioCryst and Idera creates a unique player in rare diseases with scale and a strengthened competitive position; provides more opportunities for success through a diversified late stage pipeline, as well as the variety of early stage programs and supporting assets; creates enhanced development opportunities through the synergy of combining two unique discovery engines; brings together best-in-class people with extensive clinical and commercial knowhow in rare diseases; and increases our financial strength and flexibility through significant cost synergies and a stronger cash position. This is truly an opportunity where as a whole has the potential to be much greater than the some other parts, and we believe the benefits of this combination for shareholders of both companies are compelling. With that, I'll now turn the call back over to Sonya to take your questions.

Thank you [Operator Instructions]. Our first question comes from Charles Duncan of Piper Jaffray. Your line is now open.

I had a couple of operational questions and that was primarily along the lines of the APeX-2 trail. And I'm kind of wondering, could you characterize how this site initiation in going and perhaps the screening of patients in terms of their background therapy or their background attack rates. And whether or not there has been decent investigator interest in the trial?

I am really pleased with the study startup progress that we’re making in the U.S. right now; sites are opening, patients are on screening, they do have to have some attacks in the screening period before randomization occurs, and that’s happening. So everything is going really well, I would say.

And I would add, the background therapy and background treatments, it’s all over the board. In the U.S., there is a lot people that are on prophylactic therapy, there are some people that are on on-demand therapy and we’re seeing both coming into the trial. And I would add to Bill’s comments the enthusiasm for this trial is the best we’ve seen in all the trails that we’ve done thus far. I mean, we normally would take physicians that would say initially that they had four patients and we cut it in half, because we didn’t think they could get this many, now we get patient that say, two initially and then they come back and say, no I have four. So the enthusiasm level is very high.

Given the enthusiasm for the trial, I'm sure that you have considered. But could you help us understand how you’ve considered that enthusiasm in terms of considering the noise in the trial or the noise that could come from the trial due to any investigator or patient biases with regard to expectations?

I have experienced with all the studies we’ve done today is the blinding works as intended and I don’t pay any attention to blogs or anything. I think that the progress of the trial will be standard it’ll run according to protocol. And we’ll do the analysis stipulated on the protocol. And I think the enthusiasm comes from people’s desire to have an oral treatment prevent their attack, that’s clear. And every meeting we’ve gone to, every patient conference, every publication from independent researchers on patient preferences, the FDI open forum, they’re all aligned around much better root of administration to prevent attacks, or that’s what driving this. And I think that I'm very hopeful that patients who come on the study will be highly motivated to stay through their 48 weeks of treatment, 24 weeks of line of treatment. They might be getting a placebo, but then they know they’re going to get open -- they know if they’re going to get active drug in the second 24 weeks. So I think it’s very attractive study and looking forward to making progress per our plan.

And it’s your questions around, could we have a strong placebo effect, it’s a 24 week study, I think, but it was a shorter study that might be more problematic with this enthusiasm and potential bias. But when you have a 24 week study and you have an entry criteria of one attack per month, the likelihood that you're going to see attacks in the treatment period is pretty high, really high.

Make sense, I am little naïve to these things. So last question may be more of a perspective build there, and that is on lana’s priority review. I am wondering what your thoughts on that are and in terms of the regulatory environment in general, an unmet need for HAE?

I think that’s a good thing that new treatments for HAE getting treated from the perspective of the significant medical need that it sits in the disease.

Yes, it’s a good sign, especially given that that’s the same we’re going through it.

I'm assuming it gets approved by late summer. I guess, in terms of the APeX-2 enrollment and site -- obviously site initiation. How do you feel about getting some patients in there and perhaps even nearing completed screening by or before the time lana comes on board?

So we’re planning the study. We factored in the likely approval of the kallikrein antibody in the time frame that made the most sense, and we’ll be planning to open the remaining sites in the United States and then start opening sites in Europe. So I think we’re well prepared.

Yes, the site initiation is going very, very fast, so in the U.S., so that's good.

Thank you. Our next question comes from Brian Abrahams of RBC Capital Markets. Your line is now open.

This is Craig on for Brian, congrats on the progress and thanks for taking my question. Just wondering if you could comment perhaps on the comprehensiveness of the merger process, just curious that essentially this is certainly with the perceived value of BioCryst and 7353 clearly for that proxy that was really select today, there appear to be a great deal of interest from all third parties before the APeX-1 data. But I'm just curious how satisfied you are around the idea that a review was fully realized post the data and that any potential parties or partners were fully engaged to help realize that value? Thanks.

So let me really clear. At BioCryst, the Board and management has been looking at strategic options almost the entire time I've been at BioCryst, the 11 years. And in the last two years, we map out the detail in the background section of the proxy statement. You can imagine that there’d be more interest as we get closer to data and as we have data, and you can read the proxy and you can see that. But the key was what strategic option was compelling to the Board of Directors to sign-off on a deal. And this Idera one was that, right. It's a late stage pipeline, diversified late state pipeline. It's got a two complementary discovery engines, talent that's complimentary and financial capability and flexibility to create value way greater than what we could do as a standalone company. And so that's what drove us to pull the trigger with Idera.

And then just looking forward, I'm just curious if you could provide just some color -- just around on your assumptions on 2125. It sounds like the NewCo will have a prior election for out-licensing 2125 following the merger. So perhaps if you could provide if possible additional detail on and what your assumptions are for the potential term for monetization of that asset that shaped your valuation assumption for Idera the company. Thanks.

So, Bill described why the collective set of data, the clinical data and the translational data led us to believe that there is something unique here that turns cold tumors hot and could be really attractive, not only in melanoma or refractory melanoma but in other tumor types as well. Ben has said this multiple times that a company the size of Idera and even a company the size of NewCo, doesn’t have the financial wherewithal to be able to do large umbrella studies across multiple tumor types to take full advantage of the potential of 2125. And so Idera and again, you’ll see this is in the background section of the proxy, has been in conversations since ESMO and FITC with potential partners and will evaluate whether or not those deals take place. If they do that’s a source of capital that could be really meaningful when you look at some of the comparable deals out there, it could be really meaningful to the NewCo. But as Ben always says, there are deals that are done and deals that aren’t don’t. And right now, we don’t have a deal that’s done yet for partnering. So the way we look at it is its refractory melanoma and you’ll see in the proxy statement two other tumor types that we use to come up with the valuation that we thought were manageable for NewCo.

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

Just to clarify, I’m not sure you said that the guidance you gave, is that include the merger or that’s just standalone?

That’s standalone BioCryst only.

And then just with respect to Zenith, what do you want to see in that study to say how we’re going to move forward in the treatment of attacks?

Really two categories of things we’d like to see coming out of Zenith. One is that in the modern era where are patients are treating themselves with injectable therapies to treat angioedema attacks at home, that you can actually run a study and get an answer. So that’s never been done before. The studies with licensing studies for [indiscernible] for example had patients to attain the clinic, while they have an attack and all of the oxidations were made in the clinic. So it’s a different era and you can’t do that anymore. So we need to establish that we can successfully get the patients to administer the experimental medicine at home, record all of the details that we need and is a signal that comes out of that. The second thing we need to see is what type of evaluation gives the most information about the efficacy. So we’ve got -- there are different ways to do that, there’re digital analog scales there is time to relief type of endpoints and the like. So we’ve got a range of endpoints in this proof of concept Phase 2 study that we’ll look at, and that will help us. Assuming we answer the first question positive, the answer to the efficacy will help us design the next step, which could possibly be pivotal study depending on the results of this one. Obviously, we’re looking at safety. There is no reason to believe that the drug might be safe and well tolerated. We’ve got lots of experience with that now. So obviously, we’ll look at it. But the two main things are operational success and a treatment effect that is attractive and with an endpoint that we can carry forward into the next study.

I think one thing that surprised Bill and I is the enthusiasm for this trial and how -- since the fall ramp up in a moment just rocketed. So I think we have expected that the pace would be a little bit slower and we had time to look at data and ultimately have 36 patients enrolled, randomized and enrolled in the top dose. So we made a decision to move to the next dose rather than wait to look at that data and then move. So I think that’s indicative of the desire to have an oral liquid as a treatment for acute attacks.

Thank you. Our next question comes from Maury Raycroft of Jefferies. Your line is now open.

This is Michelle on for Maury. We were hoping you could elaborate more on the merger and maybe specifically some of the ways you plan to direct your discovery platform in synergistic way that could maybe result in competitive advantage for future programs. I know you mentioned earlier some conjugates in combinations. But could you may be elaborate on how you’re thinking about moving some of those forward?

So let me just start now and pass it to Bill. So I think first and foremost, both companies have multiple decades of experience refining their expertise in their respective platforms. So with us its structure based drug designs, small molecule drug development. With idera it’s nucleic acid and oligonucleotide chemistry. And I think both companies have gotten really, really good at that. And so just looking at those two things alone, not in combination, what it does is it allows you to open up a number of additional rare diseases that quite frankly BioCryst couldn’t have perused, because we didn’t have that capability. And quite frankly there are only a limited number of rare diseases where you can bring forward small molecules and create oral drugs with enzyme inhibitors. And so just increases the universe of the disease that we can go after and bring forward unique therapies for patients suffering from rare disease. And I’ll let bill talk about synergies between the two.

I would be very reluctant to limit the possibilities from combining two very creative research groups. And I think what I hope to see and what I full year expect to see is that we’ll open up fresh opportunities and not just for disease targets that one or other platform couldn’t go after. For example, there might be tissue types that would not be addressable with an oligo platform for one reason or another. But not just using the other platform, I think the combination of the two in a variety of interesting ways could help to address targets that couldn’t be approached with either platform alone. And as an example of how we intent to proceed, we’ll be looking again at the rare disease universe of information and thoroughly analyzing that to identify those types of targets and coming up again with a short list. Obviously, we’ve done that in the past and that’s where our FOP program came from, for example. But we need to do that again with a fresh approach to take full advantage of both the oligo and the small molecule and the combination ideas, so that we can identify attractive targets with high unmet need principal patient populations and commercially attractive possibilities.

And this was an important driver in doing the deal. Obviously, having late stage phase three products in two of them that are highly attractive with meaningful data Phase 2 data behind them was the biggest driver of our attractiveness to this deal. But once those are on the market, you've got to refill the pipeline. And what Bill and I described is exactly how we’ll continue to fill the pipeline and have unique products for patients who suffer from rare disease. And so that build sustainable value for shareholders.

And just one other follow-up on that. When you think of the different risk profiles of the assets of Idera versus BioCryst. When you look through those Idera assets, what is BioCryst most interested in advancing internally and how it’s having the singular or the organization going to help advance it?

Just by having more new diversify risk first off, but that's not enough. Obviously, with IMO-2125, Bill articulated the set of data; so you've got Phase 2 clinical data and you've got translational research data for proof of mechanism. So we understand why we're seeing the effect that we're seeing. From our perspective, that's important to leading us to conclude that the chances of being successful in a Phase 3 trial is high, and also the chances that it could be used in other tumor types is high. And so that's how we look at that risk. Of course we think that's with our Phase 2 data from APeX-1 that we also have a high probability of repeating the success that we saw in APeX-1 and APeX-2. And so getting both of those drugs to market creates real value. Beyond that, it's a bit more exploratory. With Zenith-1 that Bill laid out some of the differences in past acute therapy study, so that adds some additional risk. And with 8,400 from Idera, there is less data to support that there is proof-of-mechanism. And so there is more risk on that program and that's how we assessed it. And then the early stuff is always got more risk, right. But when you combined it all together, I think the important thing is it was really compelling that the combined organization would provide greater value for shareholders.

Thank you. And our next question comes from Gena Wang of Barclays. Your line is now open.

Maybe just one more question regarding the merger process. I'm wondering could you walk us through the expected time line for the next steps in order for this to complete?

So we filed with the SEC the S-4. There will be a review process with the SEC that can be a minimum of 30-days it can be longer if there is back and forth. Once that's done, we will file the proxy, mail it out, set the record date for the shareholder meeting of the respective companies and then the shareholder meetings will be held or it will be taken and the deal will be closed. And so we’re saying all of that will take place in the second quarter. It's hard to predict exactly when because of the SEC review.

And then one question regarding the liquid formulation of the BCX7353. Just wondering could you remind us the PKPD of the liquid formulation versus oral formulation and how would the -- so like maybe one follow-up question is how would the Zenith-1 data read through to the APeX-2?

I didn’t quite catch the last part of your question.

The Zenith-1 data…

So first of all the general pharmacology of the drug is going to be exactly the same. The advantage of getting it into liquid is you don’t have to breakdown the gel of the capsule or dissolve powder content to capsule before it’s dissolved. So you’re giving the product already dissolved that might gain an additional 15 to 20 minutes, which might be helpful in the setting of an acute attack of Angioedema. It might also be a bit easier to swallow a liquid under those circumstances. In any case, we have studied the PK of course of the liquid formulation exactly as we predicted, and we study that in handful of HAE patients who are otherwise well at the time, make up what we intended to see. Just as a reminder, this is a drug when you give it every day for prevention of attacks because of its long half life it takes a while to get to steady state. So the steady state exposure of let’s say round about 250 milligrams a day would be equivalent to the single day exposure of the dose that we’re studying off with Zenith. So we know quite a lot about the PK of the drug. We understand the PK profile of the liquid formulation. And attractive aspect in addition to the rapid increase in blood levels after ingestion is the sustained long exposure you get with a single dose. So what I am hoping to see is that we get very nice efficacy results out of Zenith and there is no rebound in patients but have to take rescue medicine during the following 24 hours, for example. In terms of linking of PK between all the results of Zenith and APeX-1, I think it’s hard to extrapolate the results of a prophylactic study to an acute study, they have different things.

Is it fair to look that target threshold?

Yes, we certainly done that in our thinking. And I think there is less research that goes to establishing a target threshold for treatment of acute attacks compared to site -- the analysis a compact study, which has been very important in the field. We faced it off that and we’ve deliberately overshot those thresholds in the doses we’re studying in Zenith. So we’re giving it it’s best chance.

Thank you. Our next question comes from Serge Belanger of Needham and Company. Your line is now open.

A couple of questions on 7353 in APeX-2, it sounds they get still on track to initiate this quarter. Is the merger at all an influence on getting the study started? And then second question related to APeX-2 is, I think during the last talk that you talked about a blinded interim analysis for powering assumptions. Is that something we could expect in the second half of this year and is that something you plan on making a public announcement on?

So I'll take the first part and Bill can take the second. So now there is nothing that’s interfering with the progress that we’re making on APeX-2, the team is completely focused -- sites are getting up and initiated, patients are going through screening and we’re on track, as I said in my prepared remarks, to hit our timeline of dosing the first patient in the study in the first quarter. And we’re working. Bill and I are working with the team to make sure that we hit our timelines, because that’s just really critical to the new company. And then Bill you want to talk about interm…

We should set expectations appropriately low for what you learn about interim analysis. This is simply to look at the standard deviation in a blinded way and check that our pairing assumptions with fair. If the pairing assumptions were fair and no change to samples -- no increase in sample sizes needed, then we won’t do anything and we’ll just complete the study. So the likelihood is that nothing will -- that will be the outcome and we’ll just complete the study as designed and that will be that. So we're not going to be seeing any efficacy data whatsoever. Just wanted to make sure that’s clear. It’s a very common thing to do. It’s a standard path of regulatory guidance and that regulators encourage sponsors to do that type of analysis to double check their pairing assumptions that’s all.

The last thing you want to have is you complete a Phase 3 study and you make some assumption that are we’re going to correct in terms of standard deviation and didn’t have an opportunity to we realize that’s crazy.

So in terms of timing, we need half the subjects through 24 weeks before we do that. So is that going to be this year? Maybe not. But I'm not worried at all about the timing or outcome of that analysis.

Thank you. And our next question comes from Tazeen Ahmad of Bank of America. Your line is now open.

May be just on big picture, as you think about your organization post merger in terms of the commercial organization that you want to build, you’ve mentioned John that you have two late stage assets one is in angioedema and one is going to be oncology. How are you thinking or rather has there been any change to how you're thinking about building out the commercial structure? And can you give us a sense of how big of an organization you foresee having?

We look at refractory melanoma metastatic melanoma as an orphan indication and in terms of size of commercial infrastructure similar to a rare disease. So it’d be like having 7353 for HAE and having an L2 inhibitor for FOP. You're not going to use the same sales force because they don’t call in the same people. But both are very small and both are highly profitable, and so both make sense. And so depending on how partnering discussions evolve and what deal structures end up happening, we’ll see how that all plays out. But you’re right, if we end up, if the new company takes 2125 forward in metastatic melanoma, it’s a small sales force calling on small number of physicians.

Can you give us a little bit more color on what you mean by small?

Certainly, less than 100, probably less than 50. I mean for HAE, for example, you're looking at a sales force of somewhere in the 40s, 30s to 40s, and so small.

And then as you grow closer to having pivotal readout, is there any update on market data in terms of preferences, obviously the [indiscernible] study has enrolled encouraging. You mentioned that you’re getting patients that are both currently on prophylactic treatment as well as patient that are on acute only treatment. Is there a specific population that you think would be your sweet spot given what you know about the profile of your drug thus far that you think you could particularly have strong attraction with right from the beginning?

I think, obviously, people that don’t like needles is a great spot to start. And our market research says somewhere between 50% and 22% of patients are still on antigens. And so going after those folks is no brainer. But there is also the switch. I mean we've had patients that we've heard of that are currently on prophylactic therapy that are stopping it to go on to our study. And it's not just [indiscernible]. And so that's encouraging to us as well. I mean, we've talked about ways to enhance the switch. Our market research is very solid right now in terms of preference and maybe it's worth walking through that real quickly again. So we've looked at or talked to 178 U.S. physicians who treat HAE and 101 patients, and we presented them in a conjoint analysis with profile of HAEGARDA, the profile of lanadelumab prior to the data, but with a really high response rate, I think north of 80% with once a month. So it's best convenient dosing once a month injection. And then we have the profile of 7353 and we threw in the kitchen sink, because you know, it's easier to take that stuff out later than it is to put it in. And we held everything constant and varied the efficacy of 7353 and the preference share largely stayed the same from 55% reduction all the way up to an 85% reduction. And what that tells us is that there is a really strong preference for once a day oral medication. And so we're really excited about that. We’ll continue to run market research as we get closer to launch with new products on the market, but the initial findings are extremely encouraging.

And then last question, Jon, assuming that trail does get approved and once they announce pricing, does their pricing have any impact on the price that you’re thinking for your product?

Of course, your competitors’ pricing always is interesting to know. And so this is the case where coming in after is actually helpful. And in particular Europe, it will be interesting because that's a bit more challenging. But yes that will definitely be helpful to us. And as I've said repeatedly, with a small molecule and a small molecule cost of goods, the flexibility we have is the best of any competitor in the space.

Thank you. And we do have a follow-up question from Charles Duncan of Piper Jaffray. Your line is now open.

Just had quick question on 7353. Can you remind us of what your plans are to move into more adolescent or pediatric patients for that candidate?

So the first thing is whenever we go to patient Summits, we have mothers or fathers with their children come up to that table and ask us may we’re going to have the pediatric formulation. So you have to have pretty convincing evidence of safety and efficacy in adults, especially with the long-term therapy before proceeding down in the ages. So I am happy to say that the APeX-2 does include adolescents. So the next step after that, after we generate that type of safety efficacy data is to warp down into earlier age group. So I think that we recognize that that's going to be an important set of studies. It would be very handy to have a formulation that could be adjusted for the age ranges. So to support that work we’ll pursue creating a special pediatric formulation. So I think that that’s all for the future. And commercially it may not be that important but it sure is very, very, very important to families with hereditary Angioedema and so that’s something we want to pursue.

Bill and I have a number of mothers who have children with HAE that continue to encourage us to more quickly to get the pediatric patients. We always keep that in the forefront of our mind.

So just I wanted to ask a question or two about the merger. The first one is that base and then perhaps it’s a bit premature yet. But have you identified and secured the plenty and then in personnel regarding clinical development leadership post merger?

So I'll take that one. So Bill will definitely stay with the new company and will be CMO responsible for obviously the HAE program and other rare diseases. And Joanna will stay with the company and see 2125 in the oncology program. So these are two late stage programs that are moving into Phase 3. And so making sure that the trains run on time and we hit our timelines and move our programs forward is really important, so disrupting those teams makes no sense.

And I guess I wanted to ask maybe a couple of questions, if you, Jon. I am not sure there is an answer here, but you’ve been pushing this elephant up the stairs for a while. And I think you mentioned a decade or so, and really port a lot of thought into it. And I’m wondering what was the key trigger here for timing. Was it that data 2125 or some other consideration?

We’ve been looking at strategic options for the majority of that 10 year period, and I just didn’t find one that ultimately made sense. And this one made complete sense now, and some of that has to do with both companies having great data in their Phase 2 programs and moving into Phase 3, some of it had to do with complementary discovery engines that we thought not only allowed us to go after more targets, but to put the two together and go places maybe others can’t. And the financial flexibility was really important in this as well. And so all of that combined convinced us, both management and the board that this was compelling transaction that could lead to much greater value than BioCryst as a standalone company, and so that’s why we’re doing it.

Well, let me ask that question again in a different way, which is a silly sell-sider attempted to further understand your thinking. And that is, one, I mean we talked about synergies and I absolutely agree that the pipeline is more diversified, and has critical mass and potentially opportunities to monetize some of the assets. But I’m wondering if the strategy chosen versus say being acquired reflects any changes that you see in the HAE market dynamics or concern relative to 7353 value proposition. I always thought that as that asset got over the go line that the company would be acquired.

So listen, companies as some of the -- a banker I think told me this, companies are bought not sold. And the way we look at this, we first off feel that our valuation in the market right now is under appreciated for sure, and you’ll see that when you look at the proxy and see how we valued the company. And then secondly and this is the most important point, is how do we bigger value over a longer period of time. And just swiping the card on APeX-2, gets you some value but if you’ve got a pipeline that’s appreciated and you’ve got a discovery engine that’s appreciated, you give another asset that’s going to market, that’s appreciated. You can build a company that has much greater value and sustainable value for shareholders. And so that’s what we see, that’s the strategy and that’s how we made the decision.

I just wanted to ask one more question, and that is related to when I talk to investors, they often prefer risk diversification across the portfolio of different physicians and this merger clearly seems to be a good way to build a company, but less so a stock at least in the short run, and because in the past it was clearly a pure play HAE company. And I'm going to ask you to speculate here. But what milestones would you point to in the future that may reaffirm your conviction in the strategy, anything in particular?

I think the ASCO update on the readout of 2125 will be an important event. They’ve got five out 10 responders, I think they’ll have up to 21 or maybe even more than that at the time they do the ASCO readout. So understanding what response rate we have at that point in time, will be very important. Flipping the card on 8,400, we said there is greater risk because there is no proof of mechanism data like you have with 2125, but that card will be flipped, if that’s positive that’s great, if it’s not it will be stopped. And then the read out we said in the second half of the year on the 750 milligram cohort with Zenith 1 will give us a really good sense, not only on the primary end point but the secondary end points as well. And what are we finding as Bill says in the modern era when patients are treating themselves at home much quicker than if they have to go in into the clinic. And then of course the progress that we’re making on both our pivotal studies, 2125 and APeX-2 with 7353 and then looking into the next year the data read out on APeX-2 and also moving our L2 inhibitors into the clinic, I mean very, very exciting number of catalysts in the combined company that will show progress and give you a sense of it, does this strategy make sense.

Thank you. And this does conclude our question-and-answer session. I would now like to turn the call back over to Jon Stonehouse for any closing remarks.

Thank you. Again, we're pleased with the significant progress we made in 2017, as well as our strong start in 2018. We’re focused on moving or programs forward and hitting our timelines. And we look forward to completing our merger with Idera to position us to deliver enhanced value to shareholders beyond what we could achieve as a standalone company, as well as life changing therapies to more patients suffering from rare diseases. Thank you, and have a great day.

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