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First Quarter 2021 Earnings Highlights: BCRX and GRTS

BioCryst Pharmaceuticals (Nasdaq: BCRX)

Rating: Outperform

PT= $20-$30 (in 3-12 months)

In the over 30 years since its inception, this was by far the most historic and monumental earnings call for BCRX. Not only did revenue for Orladeyo smash analysts expectations but management had some very exciting updates regarding plans for pivotal trials for BCX9930 in PNH. Below we will look at key highlights across these programs and our take looking forward to mid-2021 and beyond. 

Orladeyo launch in the U.S is off to a great start and another launch in the EU is underway:

    • Net revenue for the first quarter of 2021 (1Q21) came in at $10.9M (+250% over analysts consensus estimate of $3.1M and +62% over the highest estimate of $6.7M)
    • Patients starting Orladeyo were relatively evenly split between switches from on-demand acute therapy (such as Ruconest, Firazyr, Berinert, etc) and injectable preventative therapies (Takzhyro, Haegarda, and Cinryze).
      • Patients switching from the aforementioned injectable preventative therapies were proportional to their market share (i.e. Takzhyro market share is ~25-30% so about 25-30% of patients switching from preventative to Orladeyo came from Takzhyro)
      • The remaining patients on Orladeyo were converted from the clinical trials and expanded access program 
    • Still no guidance during the launch period due to uncertainty regarding patient retention among other factors.
  • Management expects retention to be similar to what they saw in the clinical trials where ~75% of patients stayed on Orladeyo for 48-weeks
    • This very favorable, in our view
  • Payors are receptive to covering Orladeyo; Management expects the addition of Orladeyo on insurance policies/formularies to accelerate in the second quarter. 
  • European commercial team in place (Oraldeyo was approved in the EU on 4/29/21)
    • Launching Orladeyo in the European market 2Q21 (i.e this quarter) starting in Germany
    • Patients in France have early access to Orladeyo through an “Autorisation Temporaire d’Utilisation de cohort (cohort ATU)” announced on 3/11/21
  • Launch in Japan by BCRX’s partner Tori Pharmaceuticals is underway
    • Approval in Japan and the conclusion of pricing negotiations triggered a $15M milestone payment to BCRX 
  • Marketing authorization application (MAA) was submitted in the UK on 3/2/21

BCX9930 is entering pivotal trials in PNH 2H21 with FDA and BCRX in agreement on using change in hemoglobin from baseline as the primary endpoint.

  • Selected 500 mg twice daily as the dose for pivotal trials
  • Will run two pivotal studies; one will look to show superiority of BCX9930 over C5 inhibitors and the other will compare BCX9930 to a placebo 
  • The goal = broad label for BCX9930 monotherapy for PNH
  • Starting proof of concept (POC) trials in complement-mediated kidney diseases in 2H21
  • Not waiting for monotherapy data in the ongoing P1/2 POC study to advance to monotherapy pivotal trials

Financials (1Q21)

    • Cash position as of 3/31/21= $244M
    • Total Opex= $70M (vs $45M in 1Q20)
      • The increase was due to increased investment in BCX9930
    • Net loss= ($37M)
    • Total rev= $19M ($10.9M from Orladeyo)
  • Cash runway into 2023

Gritstone Bio (Nasdaq: GRTS)

Rating: Outperform

PT= $15-20 (in 3-12 months) 

After a transformative 1H21 during which GRTS launched new programs for infectious diseases and established key partnerships with government, private, and academic institutions, we see a bright future for GRTS. Despite our bullish outlook and a significant beat on earnings expectations for the first quarter of 2021, GRTS has been trading significantly lower today. In our view, this is simply a good buying opportunity considering the company is trading below enterprise value on the heels of several value creation events discussed in today’s earnings report. Moreover, GRTS has a catalyst rich second half of 2021 which could propel the stock back towards its 52-week highs.

Neoantigen Oncology Programs

  • SLATE individualized immunotherapy program is enrolling patients in a single-arm (i.e. no placebo control) study in patients with metastatic microsatellite stable colorectal cancer (MSS-CRC), gastroesophageal (GEA) cancer, and non-small cell lung cancer (NSCLC).
    • SLATE is being tested in later-lines of therapy (i.e. after patients fail first, second, and third-line approved therapies)
    • Management has plans to also test it in earlier lines of therapy
  • Also enrolling patients in the first version of slate P2 single-arm trial

Infectious Disease Programs

    • Initiated its P1 CORAL COVID-19 second-gen vaccine program supported by NIAID
      • Study being conducted by NIAID through the Infectious Diseases Clinical Research Consortium (IDCRC)
      • Can potentially offer more robust protection than the first-gen vaccines which the only prime the immune system to recognize the “Spike protein”.
  • Data from the P1 study expected 3Q21
  • Established a partnership with Gilead Sciences (Nasdaq: GILD) to develop potentially curative treatments for human immunodeficiency virus (HIV) infection

Upcoming Catalysts/Milestones (*3Q21 = July 1st thru Sept 31st*)

  • Share NIAID-IDCRC sponsored P1 CORAL data (3Q21) 
  • Presenting P1 data from the GRANITE oncology program (including longer-term follow-up of advanced disease patients) at ESMO (Sept 21)
    • Will also have some preliminary P2 data at ESMO
  • Advancing SLATE into new indications (3Q21)
  • Initiating a GRTS-sponsored COVID-19 booster vaccine study (3Q21)
    • The booster would be administered after vaccination with a first-gen vaccine
  • COVID-19 booster data expected 4Q21
  • Launch new slate program targeting an undisclosed neoantigen (end of the year)

Financials (1Q21)

  • Cash position as of 3/31/21= $199M
  • Collaboration and license rev = $40M (vs $1.3M in 1Q20)
    • Increase was due to rev from GRTS’s collaboration agreement with GILD
  • Total Opex= $32M
  • Net income= $8M (due to the license and collab rev)
  • No cash runway guidance provided but based on GRTS’s cash position and Opex we project they have a runway into ~2022




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