BioCryst: A New Actor In The Alternative Pathway Inhibition Field


  • BioCryst has just reported encouraging phase I results for BCX9930.
  • The company intends to carry out additional trials (study of proof of concept) for PNH patients.
  • A huge market of several billion dollars is at stake.
  • So far, the market does not seem to have taken into account this positive data.

BioCryst (NASDAQ:NASDAQ:BCRX) has reported promising results from the phase 1 trial which is currently being carried out on BCX9930 to inhibit the alternative pathway of complement system. The trial is being carried out on 72 healthy volunteers and has resulted in a continuous suppression of more than 95% of the alternative pathway of complement system with a 100mg dose every 12 hours and no notable adverse effects.

As I published in my previous article "BioCryst: Much at Stake in Next Phase I Results of BCX9930", I expected these good results based on the data from preclinical trials, where the alternative pathway was completely inhibited in the laboratory.

Without knowing the additional results of this ongoing phase I in PNH patients, which the company intends to report in the coming months, the oral drug BCX9930 is positioned as one of the most promising in the Factor D field.

Alexion (NASDAQ:ALXN) currently monopolizes the treatment of diseases associated with Factor D with its subcutaneous drugs Soliris and Ultimoris.

Recently, the company has offered $1B to take over Achillion (NASDAQ:OTC:ACHN) after the successful phase I results obtained from its last generation oral drug ACH5228, a drug that successfully inhibits the action of the alternative pathway with a 120mg dose every 12 hours. With this operation, Alexion manages to eliminate future competition and continue to monopolize the entire existing market for diseases associated with Factor D, with revenues reaching approximately 4B$ each year.

Now, with the promising results obtained from BCX9930 phase I, BioCryst is positioned as a significant competitor for Alexion. This is because BCX9930 has obtained even better results than those obtained by Achillion's ACH5228, managing to completely inhibit the action of the alternative pathway with lower doses of medication (100mg every 12 hours versus 120mg every 12 hours for ACH5228) and has no notable adverse effects.

It should be noted that BCX9930 aims to inhibit the C3 protein in order to achieve total inhibition of the complement system, unlike Soliris, Ultomiris, and ACH5228 which use the C5 protein as a target. This different approach allows BCX9930 to undertake its function from a different perspective, and it is able to target diseases other than Soliris and Ultomiris.

Thus, BioCryst is dealing with an interesting market of several billion dollars which they could have a good grasp of in the future if they continue to report promising data in future clinical trials.

Ironically, the market has recently been severely punishing BCRX, ignoring these good results. In my opinion, the market is discounting an imminent capital increase due to their current relatively weak cash statement. Short sellers are taking advantage of this situation, ruthlessly and speculatively attacking stock which has provoked a decrease from above $3 around two weeks ago to $2 now. In prior sessions it can be seen that most of what is traded is done through short sales operations, with daily percentages of between 50% and 70%.

In my opinion, this decline seems to be a negative market overreaction, taking into account the catalysts currently presented by the company (next NDA for BCX7353, good results phase I BCX9930, recent start phase I FOP, etc.).

Thus, in my opinion, BCRX is currently very underrated and I believe that when the price stabilizes it shall be a great entrance opportunity due to its great upside potential.

Potential market for BCX9930

As previously stated, BioCryst currently has the potential for a huge revaluation. Alexion's Soliris for treating PNH and atypical haemolytic uremic syndrome has generated Q3 sales of $990.5 million. This is a 12% increase year after year.

Ultomiris, which is used to treat PNH, is another drug which has recently been marketed by Alexion and has reported around $36M in the last quarter.

We are therefore talking about annual revenues of around $4B.

According to the statement made by BioCryst regarding the results of phase I, for the first half of the coming year 2020 the company intends to conduct a proof of concept study on PNH patients who have responded poorly to Alexion eculizumab (Soliris) and ravulizumab (ultomiris), as well as on new patients. It is estimated that at least 25% of patients treated with these two drugs shall respond poorly to treatment, since they develop extravascular hemosilis through macrophage phagocytosis. This is because PNH red blood cells bind to C3 fragments, an immune response process known as opsonisation. This reduces the clinical benefit of eculizumab despite its tremendous cost, and these patients become dependent on transfusions. There is no treatment for this patient population. This is why BioCryst's initial objective is to obtain this niche market which would suppose annual sales of approximately $1B.

However, BCRX9930 is not the only drug aiming to inhibit the C3 component which is currently being researched. The company Apellis (NASDAQ:APLS) who are currently researching their ongoing phase III APL-2 (subcutaneous) for PNH patients as monotherapy, and as a drug co-administered with eculizumab, is also directed at C3. This is currently BCX9930's main competitor since they both act on the same C3 protein, although there is a difference between both: BCX9930 is administered orally and APL-2 subcutaneously. In my opinion, this difference in the routes of administration of the drug provides an a priori advantage to BCX9930 over APL-2, since oral treatment is more convenient. Thanks to this advantage, BCX9930 can afford to be a little less efficient than APL-2 in order to obtain a significant market share.

Therefore, attention must be paid to the results of phase III of APL-2 for PNH which are expected for this last quarter in order to have a reference regarding the effectiveness that should be marked by BCX9930 in the upcoming data from the proof of concept study on PNH patients. Said study shall be reported during the first half of 2020. For those of us invested in BCRX, we hope that Apellis does not set the bar too high.

In principle, PNH would be the initial objective of BCX9930, although there are other additional indications to which the drug could be directed. Additional potential orphan indications for complement inhibitors include, but are not limited to, optic neuromyelitis (NMO), ANCA-associated vasculitis (AAV), C3 glomerulonephritis (C3G), IgA nephropathy (IgAN), warm autoimmune hemolytic anemia (wAIHA), focal Segmental glomerulosclerosis (FSGS), and cold agglutinin disease (CAD). Each of these pathologies has a potential revenue of more than $1B. Therefore, being prudent and taking into account competitors that may appear in the future, as well as the results of future trials, a share of approximately 25% of the PNH market could be granted to BioCryst. This would ensure annual revenues of $1B which, knowing that companies in the biopharmaceutical sector are trading at a ratio of 5 times the revenues, would give BCRX a future capitalization of approximately $5B (twenty times the current capitalization).

These simple calculations help us to appreciate the enormous revaluation potential that BCRX currently presents, always bearing in mind that BCX9930 is still in the very early stages of research, and therefore, there is a long way to go.

For a company like BioCryst with a current capitalization of about $250M, the possibility of participating in this appetizing market would mean multiplying its future capitalization by several digits.

In this assessment I have not taken into account the other drug (BCX7353 to treat HAE) for which the company intends to submit an NDA to the FDA this quarter and aims to start marketing in 2020. It is expected to report annual revenues of between $200M and $350M.

The following table presents a summary of the main actors in the complement system field.



Current stage

Regimen dose

Target protein








Phase III










Phase II





Phase I





Phase III





Phase I



Source: Author elaboration

Why has the stock price dropped so much?

Source: Yahoo finance

It appears that the market has not taken into account the good results reported in phase I of BCX9930, given that following their publication BCRX's stock price has fallen from $2.50 to the current $2. In my opinion, there are several reasons to explain this recent decline:

  • Decreasing medium-term trend that began last May after the publication of the results of phase III of BCX7353 when the market penalized a lower efficiency rate than the Takhzyro competitor.
  • Data recently reported from BCX9930 phase I (the market considers that we are still at a very early stage).
  • Discount of a possible imminent capital increase, due to the current cash statement.
  • Short sellers' speculative attack.

As can be seen in the following table, short sellers' activity has been very high recently, with average daily negotiation exceeding 50% over the last 20 days:

Most recent short volume percent (10-31-2019)


Average short percent last 20 days


Short percent standard deviation


Number of standard deviations away from mean


Source: Volumebot

In my opinion, these factors explain the recent sharp decrease in price, a decrease meaning that BioCryst is currently listed with a huge undervaluation. Thus, once the price stabilizes, which I believe shall happen soon, this would be the time for investors with higher average prices to take positions, or new investors who wish to initiate positions in BioCryst.

Cash Statement

According to financial statements from 30th June onwards, they had $98M in cash.

With regards to the burn cash rate, they have spent $53M in the first half of 2019 and expect to spend approximately 105M$ for the whole year, so the cash expense for the second half of this year would be around $52M. By the end of this year, this would give a cash balance of approximately $46M.

In terms of credit facilities and thanks to the $100M secured loan facility with MidCap Financial Trust, they may have an additional $30M in this last quarter of the year based on the good results obtained in the Apex-2 trial, as well as an additional $20M when BCX7353 gets approved by next year.

All in all, BCRX are likely to have to resort to a capital increase during the first half of the upcoming year 2020 in order to fund the multiple trials that are currently being developed.

Even with this risk of dilution, I believe that the current price levels ($2) present a good entrance opportunity.

BCRX Risks

As in any biopharma there are risks for those who take positions in the company:

  • Risk of a capital increase that causes dilution for shareholders.
  • Data from the next trial phases may not be as expected or may be lower than those for competing drugs.
  • Negative response from the FDA to the NDA for BCX7353.


BioCryst has just reported encouraging phase I results for BCX9930. The pathway suppression rate has been greater than 95% with a 100mg dose every 12 hours and has no notable adverse effects.

The company intends to carry out additional trials (study of proof of concept) by administering the selected dose as the one that has behaved best, that being 100mg every 12 hours, to PNH patients who have responded poorly to Soliris and to new patients. In my opinion, the data deriving from these additional trials, which shall be reported during the first half of 2020, shall confirm the excellent results presented in this first part of phase I.

A huge market of several billion dollars is at stake, in which Alexion has been the only player so far, and intends to remain so, because their intention is to eliminate all possible competitors that may arise through buyouts, just as they did with the recent $1B buyout offer for Achillion after the publication of the good results for ACH5228.

However, BioCryst, on their way to take a slice of the PNH market that currently monopolizes Alexion, has one competitor -Apellis- who shall present the results of phase III of their APL-2 in the last quarter. This is a subcutaneous drug for PNH with the same approach as BCX9930, since both drugs act on C3 protein. Attention must be paid to the results of APL-2 in order to determine where the bar is set in terms of effectiveness.

So far, the market does not seem to have taken into account this positive data, either because of the imminence of capital increase, or the fact that we are still facing very early stages, etc. However, it is clear that BioCryst, at the current level ($2), is highly undervalued by the market and I believe that we shall see a much higher stock price in the future.

This article was written by

I have a degree in Economics from the University of Seville. Master in Accounting and finance. Currently working in a large Spanish bank. I've been investing in the stock market for several years. I like reading and sports.

Disclosure: I am/we are long BCRX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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