Looking to Phase II development of its lead product in the near term, BioCryst Pharmaceuticals Inc. raised about $21.4 million through a registered direct offering of stock.
The Birmingham, Ala.-based company priced 3.6 million common shares at $6 apiece to institutional investors. The per-share price reflected an 11 percent discount to Monday's closing bid for the stock. On Tuesday, the shares (NASDAQ:BCRX) fell 2 cents to close at $6.64.
"We've got a pretty full plate of clinical trial activity that's going to be going on this year that will consume some pretty good resources," Michael Darwin, BioCryst's chief financial officer, told BioWorld Today. "So we just wanted to shore up our cash position to maintain a strong balance sheet."
Prior to the offering, BioCryst reported 17.8 million shares outstanding and $25.7 million in cash, cash equivalents and investments as of Dec. 31. Its quarterly burn during the preceding three-month period totaled about $3.3 million, a figure Darwin said would grow "significantly as these trials come on board."
Its drug development activities are focused in large part on BCX-1777, a purine nucleoside phosphorylase inhibitor in clinical development for T-cell malignancies. The FDA recently designated the product an orphan drug for treatment of T-cell non-Hodgkin's lymphoma, which includes cutaneous T-cell lymphoma. BCX-1777, which functions by blocking the T cell's DNA synthesis machinery, remains in four U.S.-based Phase I trials, and BioCryst plans to begin Phase II studies later this year.
More specifically, Darwin said BioCryst plans to begin a Phase II trial in T-cell leukemia patients by the end of this quarter, followed by a Phase II trial in cutaneous T-cell lymphoma patients in the second quarter.
Another drug candidate, BCX-4208, is a second-generation inhibitor of purine nucleoside phosphorylase that Darwin said BioCryst hopes to move into the clinic for psoriasis late this year.
The company also has preclinical programs, including one in the lead optimization stage for hepatitis C, as well as research in the area of the tissue factor/Factor VIIa complex, where the blood-clotting cascade begins.
In connection with the transaction, BioCryst granted the lead investor, OrbiMed Advisors in New York, the right to add a representative to its nine-member board. The shares are registered pursuant to BioCryst's $60 million shelf registration statement, which last month was declared effective by the SEC.
"We didn't want to take the whole thing down and do a full follow-on, as it just made sense to get what we needed at this point," Darwin said. "We're hoping that as we get data from some of these trials this year, our stock will reflect that and if we need to raise [additional funds], we'd be able to do it hopefully at a higher valuation down the road."
Boston-based Leerink, Swann & Co. served as placement agent for the transaction, which the company expected to close Tuesday.