BioCryst Pharmaceuticals Inc. (BCRX), is a pharmaceutical company that designs, optimizes, and develops novel small-molecule drugs that block key enzymes involved in the infectious and inflammatory diseases. It has its focus on oral treatments for rare diseases. Headquartered in Durham, NC, BioCryst Pharmaceuticals Inc. has 65 employees and is currently under the leadership of CEO Jon P. Stonehouse.
The company’s stock turned downward in the recently, after it announced a secondary offering. BCRX plans to sell $80 million of common stock, with an overallotment option for an additional $12 million. The pricing of public offering includes 15,533,981 shares, offered at a price of $5.15 per share. The underwriters for the offering are JPMorgan and Barclays.
As per management, the proceeds are to be used for general corporate purposes, which may include funding the global launch preparation of BCX7353; expanding global awareness and commercial and manufacturing efforts; expanding infrastructure, including commercial and manufacturing, to benefit BCX7353 and the rest of the program’s clinical research.
Prior to this, the company also announced final results from its Phase 2 – APeX-1 clinical trial in hereditary angioedema (HAE). The observed efficacy, dose response, PK, safety, and tolerability profile of BCX7353 strongly support BCRX’s advancement into Phase 3 development. Final results from the three parts of the trial showed treatment with BCX7353 reduced HAE attacks as much as 90% compared to placebo.
Upcoming Catalyst/Milestone: With an active IND in the US and the completion of APeX-1, BCRX is now preparing for meetings in the fourth quarter of this year with the FDA and EMA to finalize the Phase 3 program. The company reiterated its goal to start the Phase 3 efficacy and long-term safety trials in the first quarter of 2018.
Furthermore, BCRX announced its earnings reports on August 7th, 2017. For the three months ended June 30, 2017, revenues decreased to $3.1 million from $4.8 million in the second quarter of 2016. The decline was primarily due to a decrease in collaboration revenue under U.S. Government development contracts. The net loss for the second quarter of 2017 was $16.9 million, or $0.21 per share, compared to a net loss of $16.3 million, or $0.22 per share, for the second quarter 2016.
Notwithstanding the muted financial and stock performance in the recent past, BCRX’s prospects are strengthened by the company’s promising drug pipeline. The company’s steady progress towards an effective treatment for HAE provides a lucrative buying opportunity to the long-term investor.
In fact, the Company’s stock has unsurprisingly found enormous action in the past and with the recent developments, analysts have revised their outlook on the stock. The stock currently has an average rating of “Buy” and a consensus price target of $9.50. Considering present valuation, the company is at a favorable risk reward position.
About the Company:
BioCryst Pharmaceuticals designs, optimizes, and develops novel small molecule drugs that block key enzymes involved in rare diseases. BioCryst has several ongoing development programs: BCX7353 and second generation oral inhibitors of plasma kallikrein for hereditary angioedema, and galidesivir, a broad spectrum viral RNA polymerase inhibitor that is a potential treatment for filoviruses. RAPIVAB® (peramivir injection), a viral neuraminidase inhibitor for the treatment of influenza, is BioCryst’s first approved product and has received regulatory approval in the U.S., Canada, Japan, Taiwan, and Korea. Post-marketing commitment development activities for RAPIVAB are ongoing, as well as activities to support regulatory approvals in other territories.
Clinical Development Update & Outlook:
- Announcement of final results from its Phase 2 Apex-1 study assessing BCX7353 as a preventative treatment to reduce the frequency of attacks in patients with hereditary angioedema (HAE).
- As next steps – BioCryst, plans to finalize the design of the Phase 3 and Long-Term Safety trials after End of Phase 2 meeting with FDA and Scientific Advice procedure with EMA in Q4’17, initiate Phase 3 and long-term safety trial in Q1’18, Complete all other supporting activities for NDA and MAA filing (CMC, preclinical, clinical pharmacology, etc.) and Expand launch preparation activities over course of next year
- On August 2, BioCryst announced the dosing of the first subject into ZENITH-1, a clinical trial studying up to three dosage strengths of a liquid formulation of BCX7353 given as a single oral dose for the acute treatment of angioedema attacks in patients with HAE.
- On June 5, BioCryst announced that the U.S. Food and Drug Administration (FDA) has accepted for review the supplemental New Drug Application (NDA) for a pediatric indication of RAPIVAB® (peramivir injection), which was submitted in March 2017. The NDA has been classified by the FDA as a priority review and has a Prescription Drug User Fee Act (PDUFA) goal date for a decision by the end of September 2017.
- After discussions with the FDA, NIAID and BARDA, BCRX has delayed the initiation of the galidesivir IV Phase 1 clinical trial. Based upon ongoing conversations, the company expects the next step in galidesivir’s development will be to conduct an additional nonclinical efficacy study in a delayed treatment setting in Ebola disease before finalizing the Phase 1 clinical trial protocol design.
2nd Quarter 2017 Financial Results:
For the three months ended June 30, 2017, revenues decreased to $3.1 million from $4.8 million in the second quarter of 2016. The decrease in revenue was primarily due to a decrease in collaboration revenue under U.S. Government development contracts.
Research and Development (R&D) expenses for the second quarter of 2017 increased to $15.8 million from $14.2 million in the second quarter of 2016, primarily due to increased spending on the Company’s hereditary angioedema (HAE) portfolio.
Interest expense was $2.1 million in the second quarter of 2017 as compared to $1.4 million in the second quarter of 2016, an increase related primarily to the September 2016 closing of a $23 million senior credit facility. Also, a $400,000 mark-to-market loss on the Company’s foreign currency hedge was recognized in the second quarter of 2017, as compared to a $3.7 million mark-to-market loss in the second quarter of 2016.
The net loss for the second quarter of 2017 was $16.9 million, or $0.21 per share, compared to a net loss of $16.3 million, or $0.22 per share, for the second quarter 2016.
Cash, cash equivalents and investments totaled $95.6 million at June 30, 2017, and reflect an increase from $65.1 million at December 31, 2016. Net operating cash use for the second quarter of 2017 was $12.2 million, and the first six months of 2017 was $21.0 million, which excludes the impact of $47.8 million of net proceeds from BCRX’s March 2017 public offering.
Key risk factors and potential stock drivers:
Successful completion of Phase 3 efficacy and long-term safety trials in the first quarter of 2018, would lead future direction for BCRX. Any adversities related to these upcoming milestones might adversely impact the overall investor sentiments.
The competition to develop a treatment option for HAE is fierce & BCRX’s business risk profile is impinged by significant peer pressure. Shire Plc. reported positive result in its phase III trial for Lanadelumab using infrequent subcutaneous injection. With an updated treatment for prevention of HAE attacks, this could be a direct competitor for BCX7353.
BCRX is still at a pre-commercialization stage and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it.
Any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor. Moreover, meaningful commercialization of BCRX’s present pipeline is not likely to happen in the near to medium term. Which is still a long-time span from today.
On Wednesday, September 13th, 2017, BCRX closed at $5.36, with an above average volume of 1.39 million shares exchanging hands. Market capitalization is $431.30 million. The current RSI is 55.28.
In the past 52 weeks, shares of BCRX have traded as low as $3.75 and as high as $9.25
At $5.36, shares of BCRX are trading below its 50-day moving average (MA) at $5.07 and below its 200-day MA at $6.09
The present support and resistance levels for the stock are at $5.12 & $5.75 respectively.
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