BIOCRYST PHARMACEUTICALS INC
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
BCRX$7.69+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001628280-24-021069
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001628280-24-035170
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 151 current paragraphs.
103 unchanged; 29 reworded; 12 added; 4 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
We are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside Biomedical, Inc.’s SCS Microinjector®to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with diabetic macular edema (“DME”). DME is an important cause of vision loss in diabetes and is due to leakage from the blood vessels in the retina. While current treatments focus on vascular endothelial growth factor (“VEGF”) inhibition, DME can develop from other mechanisms, such as the kallikrein-bradykinin pathway. This is supported by observations that many DME patients have an incomplete response to intravitreal anti-VEGF therapies that are administered every four to eight weeks. Avoralstat targets the kallikrein-bradykinin system on the retinal vascular endothelial cells and may result in less vascular leakage and less edema. Avoralstat, delivered to the suprachoroidal space as a depot formulation, is designed to provide high dose levels to the retinal vessels with long-lasting exposure, which could result in less frequent injections and a reduced burden on patients and the healthcare system.
Current report
On May 9, 2024, we announced new real-world evidence on the use of ORLADEYO demonstrating that patients with HAE in the United States experience significant reductions in healthcare resource utilization after beginning treatment with ORLADEYO.
Current report
On May 13, 2024, we announced that the Federal Commission for Protection against Health Risks in Mexico granted approval for ORLADEYO for the prophylaxis of HAE attacks in adults and pediatric patients 12 years of age or older.
Current report
On June 2, 2024, we announced new real-world evidence showing that patients with HAE who have normal C1-inhibitor level and function had a reduction in monthly attack rates after starting ORLADEYO.
Current report
On July 9, 2024, we announced that the General Directorate of Medicines, Supplies and Drugs in Peru granted approval for ORLADEYO for the prophylaxis of HAE attacks in adults and pediatric patients 12 years of age or older.
Current report
On August 5, 2024, we announced that a recent market research study showed that 52 percent of allergist/immunologists are extremely likely to prescribe ORLADEYO to more patients, up from 29 percent in early 2023.
Current report
On August 5, 2024, we announced that we have completed our clinical evaluation of BCX10013. The drug was safe and well tolerated at all doses studied; however, the level of clinical activity observed was less than other therapies on the market, and potential partners have declined to make the additional investment required to evaluate higher doses. We plan to discontinue development, consistent with our previously announced plans.
Current report
Selling, general and administrative expenses for the three months ended June 30, 2024 were $61.2 million compared to $51.0 million for the three months ended June 30, 2023. The increase was primarily due to an increase in commercial expenses to support our growing revenue as well as our newly launched regions and expanded international operations. Further, there was an increase in general and administrative expenses attributed to an increase in headcount and consulting spend to support our accounting function and an increase in information technology costs to support our growing organization.
Current report
Results of Operations (six months ended June 30, 2024 compared to the six months ended June 30, 2023)
Current report
Selling, general and administrative expenses for the six months ended June 30, 2024 were $120.6 million compared to $98.9 million for the six months ended June 30, 2023. The increase was primarily due to an increase in commercial expenses to support our growing revenue as well as our newly launched regions and expanded international operations. Further, there was an increase in general and administrative expenses primarily attributed to an increase in headcount and consulting spend to support our accounting function and an increase in information technology and human resources costs to support our growing organization.
Current report
$7.9 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement.
Current report
For the six months ended June 30, 2024, interest income was $7.6 million compared to $7.1 million for the six months ended June 30, 2023. Net foreign currency losses were $0.1 million for the six months ended June 30, 2024 compared to net foreign currency gains of $0.1 million for the six months ended June 30, 2023. For the six months ended June 30, 2023, loss on extinguishment of debt associated with the repayment of the term loans under the Athyrium Credit Agreement was $29.0 million.
Removed paragraphs (4)
Previous report
We are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside Biomedical, Inc.’s SCS Microinjector®to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with diabetic macular edema (“DME”). DME is the most common cause of vision loss in individuals with diabetes, and at least one-third of patients have persistent DME despite anti-vascular endothelial growth factor therapies, which are administered via monthly injection. Avoralstat, which was previously studied in an oral formulation in a phase 3 trial in patients with HAE, has high potency and low solubility, two characteristics we believe are important to achieving potential efficacy with reduced dosing frequency in the eye for DME patients.
Previous report
On February 19, 2024, we announced that the Italian Medicines Agency finalized reimbursement and recommended ORLADEYO for the routine prevention of recurrent attacks of HAE in eligible patients 12 years and older.
Previous report
On February 23, 2024, we announced new analyses of real-world use of ORLADEYO that showed patients who initiated ORLADEYO experienced rapid, substantial and sustained reductions in attack rates through 18 months of treatment regardless of the severity of their disease, their history of prior prophylaxis or their C1-inhibitor level and function.
Previous report
Selling, general and administrative expenses for the three months ended March 31, 2024 were $59.4 million compared to $47.9 million for the three months ended March 31, 2023. The increase was primarily related to increased headcount and increased investment in order to expand and enhance the U.S. commercial team and expand and support international operations.
Reworded paragraphs (29)
Previous wording
ORLADEYO is an oral, once-daily therapy discovered and developed by us for the prevention of hereditary angioedema (“HAE”) attacks. ORLADEYO is approved in the United States and multiple global markets for the prevention of HAE attacks in adults and pediatric patients 12 years and older. In addition, the ongoing APeX-P clinical trial is assessing an oral granule formulation of ORLADEYO in pediatric patients who are 2 to <12 years of age.
Current wording
ORLADEYO is an oral, once-daily therapy discovered and developed by us for the prevention of hereditary angioedema (“HAE”) attacks. ORLADEYO is approved in the United States and other global markets for the prevention of HAE attacks in adults and pediatric patients 12 years and older. In addition, the ongoing APeX-P clinical trial is assessing an oral granule formulation of ORLADEYO in pediatric patients who are 2 to <12 years of age.
Previous wording
We have built out our U.S. commercial infrastructure to support the launch and continued commercialization of ORLADEYO in the United States and are continuing to build our commercial infrastructure to support launches in other markets. Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and three full years of commercialization experience with ORLADEYO, we anticipate the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues. We expect approximately 80 percent of our revenue at peak to come from the United States. These expectations are subject to numerous risks and uncertainties that may cause our actual results, performance, or achievements to be materially different. There can be no assurance that our commercialization methods and strategies will succeed, or that the market for ORLADEYO will develop in line with our current expectations. See “Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain” in Part II, Item 1A of this report for further discussion of these risks.
Current wording
We have built out our U.S. commercial infrastructure to support the launch and continued commercialization of ORLADEYO in the United States and are continuing to build our commercial infrastructure to support launches in other markets. Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and more than three and a half years of commercialization experience with ORLADEYO, we anticipate the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues. We expect approximately 80 percent of our revenue at peak to come from the United States. These expectations are subject to numerous risks and uncertainties that may cause our actual results, performance, or achievements to be materially different. There can be no assurance that our commercialization methods and strategies will succeed, or that the market for ORLADEYO will develop in line with our current expectations. See “Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain” in Part II, Item 1A of this report for further discussion of these risks.
Previous wording
Revenue from sales of ORLADEYO for the three months ended March 31, 2024 is discussed under “Results of Operations” in this MD&A. Revenue from sales of ORLADEYO in future periods is subject to uncertainties and will depend on several factors, including the success of our and our partners’ commercialization efforts in the United States and elsewhere, the number of new patients switching to ORLADEYO, patient retention and demand, the number of physicians prescribing ORLADEYO, the rate of monthly prescriptions, reimbursement from third-party and government payors, the number of patients receiving free product, the conversion of patients from our clinical trials and early access programs to commercial customers, our pricing strategy, and market trends. We are continuing to monitor and analyze this data as we continue to commercialize ORLADEYO.
Current wording
Revenue from sales of ORLADEYO for the three and six months ended June 30, 2024 is discussed under “Results of Operations” in this MD&A. Revenue from sales of ORLADEYO in future periods is subject to uncertainties and will depend on several factors, including the success of our and our partners’ commercialization efforts in the United States and elsewhere, the number of new patients switching to ORLADEYO, patient retention and demand, the number of physicians prescribing ORLADEYO, the rate of monthly prescriptions, reimbursement from third-party and government payors, the number of patients receiving free product, the conversion of patients from our clinical trials and early access programs to commercial customers, our pricing strategy, and market trends. We are continuing to monitor and analyze this data as we continue to commercialize ORLADEYO.
Previous wording
BCX10013. BCX10013 is an oral Factor D inhibitor that targets the alternative pathway of complement. Factor D is an essential enzyme in the alternative pathway, thus making Factor D an attractive target to address complement-mediated diseases.
Current wording
BCX10013. BCX10013 is an oral Factor D inhibitor that targets the alternative pathway of complement. On August 5, 2024, we announced that we plan to discontinue development of BCX10013. For more information, see “Recent Developments” below in this MD&A.
Previous wording
BCX17725 is a potent and selective investigational fusion protein KLK5 inhibitor designed to provide best-in-class, potentially disease-modifying treatment for people with Netherton syndrome. Netherton syndrome is a rare, lifelong genetic disorder that often presents in neonates or infancy. The disease is caused by the deficiency of a natural inhibitor (SPINK5) of KLK5, a serine protease responsible for regulating skin shedding. Patients may have red, scaly and inflamed skin and susceptibility to recurrent skin infections. Netherton syndrome can be life-threatening, especially during infancy when patients are vulnerable to dehydration and recurrent infections. Currently, there is no approved treatment for Netherton syndrome.
Current wording
BCX17725 is a potent and selective investigational fusion protein KLK5 inhibitor designed to provide best-in-class, potentially disease-modifying treatment for people with Netherton syndrome. Netherton syndrome is a serious, rare, lifelong genetic disorder affecting the skin, hair, and immune system. People with Netherton syndrome often have red, scaly, inflamed skin, fragile hair, and are more likely to develop skin infections, allergies, asthma and eczema. Netherton syndrome can be life-threatening, especially during infancy when patients are vulnerable to dehydration and recurrent infections. Currently, there is no approved treatment for Netherton syndrome.
Previous wording
On May 6, 2024, we announced that enrollment is complete in the APeX-P trial evaluating ORLADEYO in pediatric HAE patients who are 2 to <12 years of age. We believe data from the trial will support a regulatory filing in 2025 to expand the ORLADEYO label to enable children as young as two years of age to receive ORLADEYO. ORLADEYO would be the first oral prophylactic therapy for children with HAE.
Current wording
On May 6, 2024, we announced that enrollment is complete in the APeX-P trial evaluating ORLADEYO in pediatric HAE patients who are 2 to <12 years of age. On August 5, 2024, we announced that we remain on track to submit a regulatory filing in 2025 to expand the ORLADEYO label to enable children as young as two years of age to receive an oral granule formulation of ORLADEYO. ORLADEYO would be the first oral prophylactic therapy for children with HAE.
Previous wording
On May 6, 2024, we announced that our ongoing proof-of-concept trial with BCX10013 remains on track. We expect to partner or discontinue the program later this year.
Current wording
On May 6, 2024, we announced that our ongoing proof-of-concept trial with BCX10013 remained on track and that we expected to partner or discontinue the program later this year.
Previous wording
Cost of product sales for the three months ended March 31, 2024 and 2023 was $1.3 million and $0.9 million, respectively. The increase in cost of product sales was primarily due to an increase in ORLADEYO sales in the current year period.
Current wording
Cost of product sales for the three months ended June 30, 2024 and 2023 was $1.7 million and $0.9 million, respectively. The increase in cost of product sales was primarily due to an increase in ORLADEYO sales in the current year period.
Previous wording
Research and development expenses decreased to $46.5 million for the three months ended March 31, 2024 from $48.4 million for the three months ended March 31, 2023, primarily due to a decrease in Factor D program expenses. This decrease in Factor D program expenses was primarily attributed to decreased spending on BCX10013 due to our plan to either out-license or discontinue late-stage development and commercialization, which was announced in January 2024, as well as the discontinuation of the BCX9930 program, which was announced in December 2022. These reductions to research and development expenses were partially offset by increased spending on berotralstat due to ORLADEYO label expansion and life cycle investments, such as our ongoing ORLADEYO pediatric trial, and increased spending on other research, preclinical and development costs. Other research, preclinical and development costs increased due to increased spending on BCX17725 for manufacturing costs and investigational new drug application-enabling activities and increased spending related to our other early-stage discovery programs.
Current wording
Research and development expenses decreased to $37.6 million for the three months ended June 30, 2024 from $51.2 million for the three months ended June 30, 2023, primarily due to a decrease in Factor D program expenses. The decrease in Factor D program expenses was primarily attributed to decreased spending on BCX10013 and the discontinuation of the BCX9930 program. These reductions to research and development expenses were partially offset by increased spending on berotralstat due to our ongoing ORLADEYO pediatric trial, and increased spending on other research, preclinical and development costs. Other research, preclinical and development costs increased due to increased spending on BCX17725 and avoralstat for investigational new drug application-enabling activities and increased spending related to our other early-stage discovery programs.
Previous wording
Interest expense for the three months ended March 31, 2024 was $24.5 million compared to $27.4 million for the three months ended March 31, 2023. The decrease in interest expense was primarily due to the decrease in the effective interest rate related to the 2021 RPI Royalty Purchase Agreement (as defined in “Note 6—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report), partially offset by an increase in interest expense associated with the interest accrued on the larger Tranche A Loan of $300.0 million under the Pharmakon Loan Agreement (as defined below).
Current wording
Interest expense for the three months ended June 30, 2024 was $24.7 million compared to $28.9 million for the three months ended June 30, 2023. The decrease in interest expense was primarily due to the decrease in the effective interest rate related to the 2021 RPI Royalty Purchase Agreement (as defined in “Note 6—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report), partially offset by an increase in interest expense associated with the interest accrued on the Tranche A Loan of $300.0 million under the Pharmakon Loan Agreement (as defined below), which was funded on April 17, 2023.
Previous wording
For the three months ended March 31, 2024, interest income was $4.0 million compared to $3.4 million for the three months ended March 31, 2023. Net foreign currency losses were $0.1 million for the three months ended March 31, 2024 compared to $0.2 million for the three months ended March 31, 2023.
Current wording
For the three months ended June 30, 2024, interest income was $3.6 million compared to $3.8 million for the three months ended June 30, 2023. Net foreign currency losses were $0.1 million for the three months ended June 30, 2024 compared to net foreign currency gains of $0.3 million for the three months ended June 30, 2023. For the three months ended June 30, 2023, loss on extinguishment of debt associated with the repayment of the term loans under the Athyrium Credit Agreement was $29.0 million.
Previous wording
For the three months ended March 31, 2024, income tax expense was $0.4 million compared to $0.7 million for the three months ended March 31, 2023. The decrease in income tax expense is primarily due to an increase in the amortization deduction related to capitalized research and development costs.
Current wording
For the three months ended June 30, 2024, income tax expense was $0.2 million compared to $0.7 million for the three months ended June 30, 2023. The decrease in income tax expense is primarily due to an increase in the amortization deduction related to capitalized research and development costs and the reversal of certain tax timing differences.
Previous wording
For the three months ended March 31, 2024, total revenues were $92.8 million as compared to $68.8 million for the three months ended March 31, 2023. The increase in total revenues was due to an increase of $20.5 million in ORLADEYO net revenue, including royalties, and an increase in other revenues of $3.5 million due to an increase in royalties for sales of peramivir.
Current wording
For the six months ended June 30, 2024, total revenues were $202.1 million compared to $151.3 million for the six months ended June 30, 2023. The increase in total revenues was due to a $47.7 million increase in ORLADEYO net revenue, including royalties, and an increase in other revenues of $3.1 million due to an increase in royalties for sales of peramivir in the first quarter of 2024.
Previous wording
Interest expense for the three months ended March 31, 2024 included $14.2 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $10.2 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement. Interest expense for the three months ended March 31, 2023 included $19.3 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $8.0 million of interest expense, net of deferred financing amortization, associated with the borrowings under the Athyrium Credit Agreement (as defined below).
Current wording
Interest expense for the six months ended June 30, 2024 included $28.5 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $20.6 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement. Interest expense for the six months ended June 30, 2023 included $38.8 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations, $9.5 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Athyrium Credit Agreement, and
Previous wording
Our principal sources of liquidity at March 31, 2024 were approximately $84.3 million in cash and cash equivalents and approximately $252.2 million in investments considered available-for-sale.
Current wording
Our principal sources of liquidity at June 30, 2024 were approximately $78.4 million in cash and cash equivalents and approximately $257.9 million in investments considered available-for-sale.
Previous wording
During the three months ended March 31, 2024, net cash used in operating activities of $53.7 million consisted primarily of a net loss of $35.4 million and $48.5 million of changes in operating assets and liabilities, primarily due to a decrease in accounts payable and accrued expenses and an increase in accounts receivable, partially offset by $30.2 million of non-cash items, including $19.4 million of non-cash interest expense and $13.7 million of stock-based compensation expense.
Current wording
During the six months ended June 30, 2024, net cash used in operating activities of $55.1 million consisted primarily of a net loss of $48.1 million and $66.8 million of changes in operating assets and liabilities, primarily due to a decrease in accounts payable and accrued expenses and an increase in accounts receivable, partially offset by $59.8 million of non-cash items, including $39.0 million of non-cash interest expense and $26.8 million of stock-based compensation expense.
Previous wording
During the three months ended March 31, 2023, net cash used in operating activities of $47.5 million consisted primarily of a net loss of $53.3 million and $27.7 million of changes in operating assets and liabilities, primarily due to a decrease in accounts payable and accrued expenses, partially offset by $33.5 million of non-cash items, including $20.2 million of non-cash interest expense and $14.0 million of stock-based compensation expense.
Current wording
During the six months ended June 30, 2023, net cash used in operating activities of $66.3 million consisted primarily of a net loss of $128.7 million and $34.3 million of changes in operating assets and liabilities, primarily due to a decrease in accounts payable and accrued expenses and an increase in accounts receivable, partially offset by $96.6 million of non-cash items, including $43.9 million of non-cash interest expense, the loss on extinguishment of debt associated with the repayment of the term loans under the Athyrium Credit Agreement of $29.0 million, and $26.8 million of stock-based compensation expense.
Previous wording
During the three months ended March 31, 2024, net cash provided by investing activities of $28.8 million primarily related to sales and maturities of investment securities, partially offset by purchases of investment securities.
Current wording
During the six months ended June 30, 2024, net cash provided by investing activities of $26.3 million primarily related to sales and maturities of investment securities, partially offset by purchases of investment securities.
Previous wording
During the three months ended March 31, 2023, net cash used in investing activities of $107.1 million primarily related to purchases of investment securities, partially offset by sales and maturities of investment securities.
Current wording
During the six months ended June 30, 2023, net cash used in investing activities of $126.1 million primarily related to purchases of investment securities, partially offset by sales and maturities of investment securities.
Previous wording
During the three months ended March 31, 2024, net cash used in financing activities of $1.0 million consisted of withholding taxes paid on stock-based awards and principal payments on finance lease liabilities, partially offset by net proceeds from common stock issued under stock-based compensation plans and common stock issued to directors in lieu of cash retainer.
Current wording
During the six months ended June 30, 2024, net cash used in financing activities of $3.0 million primarily consisted of withholding taxes paid on stock-based awards and principal payments on finance lease liabilities, partially offset by net proceeds from common stock issued under stock-based compensation plans.
Previous wording
During the three months ended March 31, 2023, net cash provided by financing activities of $5.1 million consisted of net proceeds from common stock issued under stock-based compensation plans.
Current wording
During the six months ended June 30, 2023, net cash provided by financing activities of $34.4 million primarily consisted of net proceeds from the Pharmakon Loan Agreement and net proceeds from common stock issued under stock-based compensation plans, partially offset by the repayment of the secured term loans under the Athyrium Credit Agreement.
Previous wording
We intend to contain costs and cash flow requirements by closely managing our third-party costs and headcount, leasing scientific equipment and facilities, contracting with other parties to conduct certain research and development projects, and using consultants. In addition, we reduced the size of our research and development organization and postponed previously planned capital expenditures at our Discovery Center in Alabama in January 2024, which we believe will help accelerate our path to profitability.
Current wording
We intend to contain costs and cash flow requirements by closely managing our third-party costs and headcount, leasing scientific equipment and facilities, and contracting with other parties to conduct certain research and development projects. In addition, we reduced the size of our research and development organization and postponed previously planned capital expenditures at our Discovery Center in Alabama in January 2024, which we believe will help accelerate our path to profitability.
Previous wording
We expect to incur additional expenses, potentially resulting in significant losses, as we continue to pursue our research and development activities, commercialize ORLADEYO, and hire additional personnel. We may incur additional expenses related to the filing, prosecution, maintenance, defense, and enforcement of patent and other intellectual property claims and additional regulatory costs as our clinical programs advance through later stages of development or as regulatory exclusivity for our products expires. The objective of our investment policy is to ensure the safety and preservation of invested funds, as well as to maintain liquidity sufficient to meet cash flow requirements. We place our excess cash with high credit quality financial institutions, commercial companies, and government agencies in order to limit the amount of our credit exposure. We have not realized any significant losses on our investments.
Current wording
We may incur additional expenses, potentially resulting in significant losses, as we continue to pursue our research and development activities, commercialize ORLADEYO, and hire additional personnel. We may incur additional expenses related to the filing, prosecution, maintenance, defense, and enforcement of patent and other intellectual property claims and additional regulatory costs as our clinical programs advance through later stages of development or as regulatory exclusivity for our products expires. The objective of our investment policy is to ensure the safety and preservation of invested funds, as well as to maintain liquidity sufficient to meet cash flow requirements. We place our excess cash with high credit quality financial institutions, commercial companies, and government agencies in order to limit the amount of our credit exposure. We have not realized any significant losses on our investments.
Previous wording
•post-approval commitments for ORLADEYO, RAPIVAB, and other products that receive regulatory approval; and
Current wording
•post-approval commitments for ORLADEYO, peramivir, and other products that receive regulatory approval; and
Previous wording
Our inventories primarily relate to ORLADEYO. Additionally, our inventory includes RAPIVAB and peramivir.
Current wording
Our inventory primarily relates to ORLADEYO. Additionally, our inventory includes peramivir.
Previous wording
We value our inventories at the lower of cost or estimated net realizable value. We determine the cost of our inventories, which includes amounts related to materials, labor, manufacturing overhead and shipping and handling costs on a first-in, first-out (FIFO) basis. Raw materials and work-in-process include all inventory costs prior to packaging and labeling, including raw material, active product ingredient, and the drug product. Finished goods include packaged and labeled products.
Current wording
We value our inventory at the lower of cost or estimated net realizable value. We determine the cost of our inventory on a first-in, first-out (FIFO) basis. Raw materials and work-in-process include all inventory costs prior to packaging and labeling, including raw material, active product ingredient, and the drug product. Finished goods include packaged and labeled products. We classify inventory as long-term when consumption or sale of the inventory is not expected to occur within 12 months from the balance sheet date.
Previous wording
Our inventories are subject to expiration dating. At each reporting date, we evaluate the carrying value of our inventories and provide valuation reserves for any estimated obsolete, short-dated or unmarketable inventories. In addition, we may experience spoilage of our raw materials and supplies. Our determination that a valuation reserve might be required, in addition to the quantification of such reserve, requires us to utilize significant judgment.
Current wording
Our inventory is subject to expiration dating. At each reporting date, we evaluate the carrying value of our inventory and provide valuation reserves for any estimated obsolete, short-dated or unmarketable inventory. In addition, we may experience spoilage of our raw materials and supplies. Our determination that a valuation reserve might be required, in addition to the quantification of such reserve, requires us to utilize significant judgment.
Previous wording
We expense costs related to the production of inventories as research and development expenses in the period incurred until such time it is believed that future economic benefit is expected to be recognized, which generally is reliant upon receipt of regulatory approval. Upon regulatory approval, we capitalize subsequent costs related to the production of inventories.
Current wording
We expense costs related to the production of inventory as research and development expenses in the period incurred until such time it is believed that future economic benefit is expected to be recognized, which generally is reliant upon receipt of regulatory approval. Upon regulatory approval, we capitalize subsequent costs related to the production of inventory.
Previous wording
Additionally, we have license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University, Industrial Research, Ltd., and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements. We expense sublicense payments as incurred.
Current wording
Additionally, we have license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University, Industrial Research, Ltd., and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements. We accrue sublicense expenses as incurred.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
For the three months ended June 30, 2024, total revenues were $109.3 million as compared to $82.5 million for the three months ended June 30, 2023. The increase in total revenues was due to a $27.3 million increase in ORLADEYO net revenue, including royalties. The increase in ORLADEYO net revenue was partially offset by a decrease in other net revenues of $0.4 million due to a decrease in royalties for sales of peramivir.
Current report — wording carried from elsewhere
Interest expense for the three months ended June 30, 2024 included $14.3 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $10.4 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement. Interest expense for the three months ended June 30, 2023 included $19.5 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations, $7.9 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement, and $1.5 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Athyrium Credit Agreement (as defined below).
Current report — wording carried from elsewhere
Cost of product sales for the six months ended June 30, 2024 and 2023 was $3.0 million and $1.8 million, respectively. The increase in cost of product sales was primarily due to an increase in ORLADEYO sales in the current year period.
Current report — wording carried from elsewhere
The following table summarizes our research and development expenses for the periods indicated (in thousands):
Current report — wording carried from elsewhere
Research and development expenses decreased to $84.1 million for the six months ended June 30, 2024 from $99.6 million for the six months ended June 30, 2023, primarily due to a decrease in Factor D program expenses. The decrease in Factor D program expenses was primarily attributed to decreased spending on BCX10013 and the discontinuation of the BCX9930 program. These reductions to research and development expenses were partially offset by increased spending on berotralstat due to our ongoing ORLADEYO pediatric trial, and increased spending on other research, preclinical and development costs. Other research, preclinical and development costs increased due to increased spending on BCX17725 and avoralstat for investigational new drug application-enabling activities and increased spending related to our other early-stage discovery programs.
Current report — wording carried from elsewhere
Interest expense for the six months ended June 30, 2024 was $49.2 million compared to $56.3 million for the six months ended June 30, 2023. The decrease in interest expense was primarily due to the decrease in the effective interest rate related to the 2021 RPI Royalty Purchase Agreement (as defined in “Note 6—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report), partially offset by an increase in interest expense associated with the interest accrued on the Tranche A Loan of $300.0 million under the Pharmakon Loan Agreement, which was funded on April 17, 2023.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, income tax expense was $0.5 million compared to $1.4 million for the six months ended June 30, 2023. The decrease in income tax expense is primarily due to an increase in the amortization deduction related to capitalized research and development costs and the reversal of certain tax timing differences.