Staff Writer

BioCryst Pharmaceuticals Inc. priced a $49 million public offering, cashing in on the 593 percent gain its shares have posted so far this year thanks to progress with flu drug peramivir.

After starting at $1.50 in January, BioCryst's stock (NASDAQ:BCRX) has climbed steadily to close at $10.40 as of Thursday. That means Friday's pricing of 5 million shares at $9.75 apiece represents a discount of only 6 percent, with no warrant coverage, which is a lot better than many recent biotech fundraisers have fared.

Even so, investors pushed the Birmingham, Ala.-based company's stock down 85 cents to close at $9.55 on Friday.

The financing will provide BioCryst with gross proceeds of $48.8 million, or $56 million if underwriters Morgan Stanley, JMP Securities and Oppenheimer & Co. exercise their option to an additional 750,000 shares to cover overallotments.

The cash will give BioCryst's coffers some needed padding. The company reported just $38.5 million in cash as of Sept. 30 after posting a net loss of $10.6 million for the quarter. Yet more money is already incoming: Peramivir partner Shionogi & Co. Ltd. filed a Japanese new drug application last month, triggering a $7 million milestone payment, and the Department of Health and Human Services (HHS) recently placed an initial $22.5 million order for 10,000 courses of the intravenous flu drug.

Peramivir inhibits the interactions of influenza neuraminidase, an enzyme that is critical to the spread of influenza within a host. Regulatory review of the drug is under way in Japan, and two Phase III studies in hospitalized patients with serious influenza are ongoing in the U.S. Data from those trials are expected to support a new drug application filing with the FDA at the end of the 2010-11 flu season.

The Phase III studies are being funded through a $180 million contract with the Biomedical Advanced Research and Development Authority (BARDA), a department within HHS. A $102.6 million contract awarded in January 2007 was designed to carry peramavir through Phase II, and an additional $77.2 million contract awarded in September is supporting the Phase III studies. (See BioWorld Today, Sept. 22, 2009.)

And with permavir's seasonal flu development chugging along, BioCryst last month won emergency use authorization of the drug for certain hospitalized patients with confirmed or suspected H1N1 swine flu who have not responded to or cannot tolerate oral or inhaled antivirals. (See BioWorld Today, Oct. 27, 2009.)

Yet BioCryst's biggest stock bump this year came not from the H1N1 hullabaloo but from two Japanese pivotal studies proving that peramavir is noninferior to Tamiflu (oseltamivir, Gilead Sciences Inc. and F. Hoffmann-La Roche Ltd.) in alleviating the symptoms of seasonal influenza. Analysts have said that while H1N1 emergency use and government stockpiling may provide nice cash infusions, permavir's long-term success is dependent on the seasonal influenza market. (See BioWorld Today, July 20, 2009.)

Although the ongoing Phase III U.S. seasonal trial program is government-funded, BioCryst plans to use at least some of the proceeds from its latest financing to support precommercial activities.

BioCryst executives did not return calls seeking comment, but the company's SEC filing also stated that proceeds will be used to support development of cancer drug Fodosine (forodesine) and gout drug BCX4208.

Fodosine is being studied in a pivotal single-arm Phase II trial under a special protocol assessment for cutaneous T-cell lymphoma. Data are expected in the first half of 2010. A separate Phase II trial is under way in chronic lymphocytic leukemia.

BioCryst started a Phase II study of BCX4208 for gout this fall.

Published  November 23, 2009