BioCryst's Korean Partner Receives Emergency Use Authorization

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BioCryst Pharmaceuticals (NASDAQ:BCRX) is a development-stage biotech company that will report over $30 million in sales in the December 2009 quarter. Peramivir, their intravenous antiviral, has been granted Emergency Use Authorization by the U.S. Food & Drug Administration for use in intensive care units against the H1N1 swine flu. Under the previous Emergency Investigational New Drug status granted last June, 32 of these patients literally at death's door were treated with intravenous peramivir, and 29 recovered. A 90% cure rate of these sickest patients suggests a bright future for the drug.

BioCryst has two overseas partners, Shionogi Pharmaceuticals in Japan and Green Cross in South Korea. Green Cross has successfully completed Phase III trials of peramivir in both the hospital and outpatient settings, and will apply for final approval early next year. In advance of that, the Korea Food & Drug Administration recently granted peramivir an Emergency Use Authorization and requested 2,000 to 2,500 courses of treatment. (A course of treatment is defined as five daily doses, although more may be used for any patient that needs it.)

There has been no English-language press release on this from either BioCryst or Green Cross, but it appears this initial order was donated by Green Cross and may be left over from their clinical trials. Green Cross does not manufacture peramivir at this time, so additional courses of treatment would have to be purchased from BioCryst. In the U.S., BioCryst donated 1,200 courses to Health & Human Services for the National Stockpile, and then sold HHS10,000 courses at $2,250 per dose. They will book the $22.5 million sale this quarter. The company is completing production of an additional 120,000 doses with a sales value of $270,000,000, or more than $6 a share. Like most biotech drugs, peramivir has a very high gross profit margin, north of 95%.

With roughly $5.80 a share in gross profits and a stock price under $10, the big question is whether these are recurring profits. About 200,000 people a year die worldwide from complications of the flu. A drug that can keep most of them alive, while saving hospitals very expensive ICU and ventilator time, seems likely to find a recurring market.

BioCryst is currently enrolling for two Phase III trials, expecting total enrollment to require two flu seasons, but staying open to the possibility it will only take this one to complete enrollment. The Emergency Use Authorization can be renewed annually until the drug is approved, whether that is in time for the 2010-2011 flu season or the 2011-2012 flu season. So, unlike almost every other development stage biotech, BioCryst may be able to report significant positive cash flow from peramivir from the current December quarter on.

Disclosure: Long BCRX