By Lisa Seachrist

Washington Editor

With competition increasing in the market for flu drugs, small-molecule specialist BioCryst Pharmaceuticals Inc. raised $50.5 million in a public offering to fund development of its flu pill and other clinical and preclinical programs.

The Birmingham, Ala.-based company sold 2 million shares at a price of $25.25 each, exceeding its expected offering revenues of $45.5 million based on a share price of $25. The money will be used to advance its lead flu drug, RWJ-270201, formerly known as BCX-1812, as well as development programs in T-cell related diseases and purine nucleoside phosphorylase (PNP) inhibitors.

The underwriters for the offering - Salomon Smith Barney Inc., of New York; Hambrecht & Quist LLC, of San Francisco; and Raymond James & Associates Inc., of New York - were granted an option to purchase an additional 300,000 shares to cover overallotments. If exercised, it would add another $7.57 million to BioCryst's coffers.

BioCryst's stock (NASDAQ:BCRX) closed Wednesday at $26.75, up $1.375.

The company and principals of the offering are under an SEC-imposed quiet period and were unable to comment on the offering.

BioCryst's stock soared 39.5 percent in August on news that RWJ-270201, an oral neuraminidase inhibitor that stymies the spread of the influenza virus, tested positive in a Phase II clinical trial. However, in the meantime, Tamiflu - a neuraminidase inhibitor in pill form developed by Hoffmann-La Roche Inc., of Nutley, N.J., and Gilead Sciences Inc., of Foster City, Calif. - joined Glaxo Wellcome plc's inhaled neuraminidase inhibitor, Relenza, as the first therapies approved in the United States for the treatment of both the A and B strains of influenza. (See BioWorld Today, Aug. 25, 1999, p.1; Oct. 29, 1999, p. 1; and July 28, 1999, p.1 .)

Another competitor of BioCryst's potential drug is FluMist, a nose-spray influenza vaccine being developed by Aviron, of Mountain View, Calif. Aviron intends to file a biologics license application late this fall. The company filed a shelf registration in September to offer up to $100 million in securities. (See BioWorld Today, Sept. 17. 1999, p. 1.)

BioCryst has an exclusive worldwide license agreement with subsidiaries of Johnson & Johnson, of New Brunswick, N.J. The companies, R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil Pharmaceutical Inc., have the responsibility for development, manufacture and commercialization of RWJ-270201. The companies are planning a Phase III trial of the drug during this upcoming flu season.

BioCryst's PNP inhibitor program has produced a lead candidate, BCX-34, which has a novel mechanism for suppressing T-cell replication. This product could one day be useful in autoimmune disease such as psoriasis and cancers such as cutaneous T-cell lymphoma and T-cell leukemia.

Should all shares of the underwriters' option be exercised, the company will have just over 17.5 million shares outstanding. BioCryst reported a net loss of $251,000 on revenues of $2.5 million for the second quarter ended June 30. At that time, the company had cash and investments totaling $24.3 million.