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BCRX    EP 4.74
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This Weeks Stock Pick & Analysis

9-1-2010 STW Stock Recommendation BCRX - Buy

BCRX like most of our STW stock recommendations has several drugs in the pipeline. Unlike most companies we analyze it is hard to say which of BioCryst Pharmaceuticals 3 drugs will be the first or best candidate to generously reward stockholders. With Trial results from 2 leading candidates expected to be released in the next few months and flu season around the corner stockholders of BCRX are entering an exciting and potentially very profitable time. 

Peramivir, an anti-viral for influenza was one of the many drugs that was looked at during the H1Ni scare late last year. Its success in trials against both A and B flu strains including H1N1 and bird flu strains as well as most hospital type flu’s are very encouraging. The IV formulation looks to be an anti-viral weapon that may be a game changer. While the stock price quickly rose and fell with the pandemic scare as did its competitors, the recent approval in Korea and continuing programs with Japan, the US government and others continue to bode well for the future of Peramivir. As flu strains will continue to evolve and mutate the need for this medicine that can treat many varieties will increase. 

Forodesine for T-cell lymphoma and several other diseases looked to be the best of the pipeline before the flu pandemic. Now it is almost forgotten but this is only because of the successful trials and partnerships of the other BCRX drugs. All indications are that good news coming on both PII trials that have been completed. The market is huge and as this versatile drug goes into PIII larger investors will take notice. 

BCX4208 for the treatment of gout has been racing through early trials with better than expected efficacy and good tolerance for this hard to tread condition. All three drugs are for conditions that can generate big sales and market cap. Eventual FDA approval of any one will make this investment a winner. If two or all three reach approval the profit potential is incredible. 

While the share price has been volatile mostly due to inconsistent income the fact that this company does now have income to go along with government funding and partnerships with big pharma should in reality be a stabilizing factor. This volatility as well as the many trial results and FDA submissions over the next 2 years will make it a traders dream but it is the long term potential that we like.  

Late last year the company wisely raised funding. That when combined with new income may get them to FDA approval without further dilution. The technical analysis of BCRX stock at the bottom of this report shows that while there has been a down trend in share price and volume it appears that a bottom is in for now and that TA indicators are now pointing to an increase. We see this as a good time to begin building a position an a company with a bright future. If you are inclined to trade we recommend building a long position and having separate trading shares to profit form the volatility.


Detailed 2010 Company Prepared Presentation Link (PDF)
 

BCRX Company Profile

BCRX NASDAQ - BioCryst Pharmaceuticals, Inc. (BioCryst) is a biotechnology company that designs, optimizes and develops  small-molecule pharmaceuticals and novel drugs that block enzymes involved in cancer, viral infections and autoimmune diseases. BioCryst integrates the disciplines of biology, crystallography, medicinal chemistry and computer modeling to discover and develop small molecule pharmaceuticals through the process known as structure-based drug design. The Company  has strategic alliances with the U.S. Department of Health and Human Services; Shionogi & Co., Ltd.; Green Cross Corporation; and Mundipharma International Holdings Limited. BioCryst Pharmaceuticals, Inc. was founded in 1986 and is based in Birmingham, Alabama and has 80 employees. 

The company has progressed two compounds into late-stage pivotal clinical trials and has several other programs in various pipeline stages. 

Peramivir, is an anti-viral inhibitor of influenza neuraminidase. Neuraminidase assists in the release and spread of the flu virus by breaking the chemical strands that hold the new viruses to the cell surface, allowing the replicated virus to spread and infect other cells. This process progresses until the host’s immune response can produce enough antibodies to bring the infection under control. Inhibiting the neuraminidase enzyme keeps new viruses attached to the cell surface, thereby preventing the spread of the virus and the further infection of other cells. Peramivir is in development for the treatment of influenza with two formulations, intramuscular (i.m.) and intravenous (i.v.). Peramivir is being developed under a contract from the Biomedical Advanced Research and Development Authority (BARDA) within the United States Department of Health and Human Services (HHS).

Forodesine HCl, is a transition-state analog inhibitor of the target enzyme purine nucleoside phosphorylase (PNP). PNP is an enzyme that plays a role in T-cell proliferation, because it is necessary to maintain normal DNA synthesis in human T-cells. Forodesine HCl is an investigational PNP inhibitor for the potential treatment of T-cell leukemias and lymphomas. The Company completed a Phase I/II clinical trial of forodesine HCl to determine the safety of repeat doses of an i.v. formulation of the drug. Forodesine has been granted Orphan Drug status by the FDA for three indications, including T-cell non-Hodgkin's lymphoma, including CTCL; CLL and related leukemias, such as T-cell prolymphocytic leukemia, adult T-cell leukemia, and hairy cell leukemia; and for the treatment of B-ALL.  An oral formulation of the compound is in a Phase IIb trial for patients with Cutaneous T-cell Lymphoma (CTCL). Additionally, forodesine HCl is being studied in a Phase II trial with an oral formulation in Chronic Lymphocytic Leukemia (CLL).

BCRX-4
Its second generation PNP inhibitor, BCX-4, is also in clinical trials. BCX-4208 is a PNP inhibitor that has the ability to suppress PNP for longer periods of time.  It is a drug candidate for the treatment of T-cell mediated autoimmune diseases, including psoriasis, transplant rejection and is in a Phase II study for the treatment of gout.  

BioCryst Pharmaceuticals, Inc.
2190 Parkway Lake Drive
Birmingham, AL 35244
United States - Map
Phone: 205-444-4600
Fax: 205-444-4640
Website:
http://www.biocryst.com


Highlights of Recent Press Releases

BioCryst's Partner Green Cross Receives Marketing & Manufacturing Approval for Peramivir in South Korea Monday August 16, 2010

BIRMINGHAM, Ala.--(BUSINESS WIRE)--BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX - News) today announced that its partner, Green Cross Corporation has received marketing and manufacturing approval from KFDA (Korean Food & Drug Administration) for intravenous (i.v.) Peramivir to treat patients with influenza A & B viruses, including pandemic H1N1 and avian influenza. Green Cross Corp. intends to launch Peramivir under the commercial name PeramiFlu® in South Korea. 

“We congratulate Green Cross on this achievement,” said Jon P. Stonehouse, President and Chief Executive Officer of BioCryst. “We are pleased that intravenous peramivir is now approved in Korea and represents the second country this year to make this important treatment option available for patients suffering from seasonal influenza. BioCryst continues to focus on completing the U.S. development of i.v. peramivir as a potential treatment for hospitalized patients with seasonal influenza.” 

Green Cross Corp. received the indication of single dose administration of 300 mg i.v. peramivir for treatment of adults with influenza A & B infection. In November 2009 after review through the Central Pharmaceutical Affairs Council, peramivir received approval for limited use in Korea in emergency cases. Approximately 50 individuals were treated under emergency use in Korea. 

In June 2006, BioCryst Pharmaceuticals and Green Cross Corporation entered into an agreement that granted Green Cross Corp. the right to develop and commercialize peramivir in South Korea. As part of the agreement, Green Cross Corp. paid to BioCryst a one-time license fee. BioCryst will receive a double-digit royalty on all commercial sales, with the royalty rate being higher for non-commercial sales made to the S. Korean Government. 

About peramivir

Peramivir is a potent, intravenously administered anti-viral agent that rapidly delivers high plasma concentrations to the sites of infection. Discovered by BioCryst, peramivir inhibits the interactions of influenza neuraminidase, an enzyme which is critical to the spread of influenza within a host. In laboratory tests, peramivir has shown activity against multiple influenza strains, including pandemic H1N1 swine origin flu viral strains. Peramivir has been studied in over 1,800 patients with complicated and uncomplicated influenza. In January 2010, Shionogi & Co., Ltd. launched intravenous (i.v.) peramivir in Japan under the name Rapiacta® to treat patients with influenza.


BioCryst Reports Second Quarter 2010 Financial Results and Provides Corporate Update Thursday August 5, 2010, 6:40 am EDT  

We are excited by the recent gout data, which is a further demonstration of our ability to execute on our clinical plans. During the balance of this year, we look forward to reporting clinical data from our second BCX4208 gout study and from our two ongoing forodesine studies in patients with cancer,” said Jon P. Stonehouse, President and Chief Executive Officer of BioCryst Pharmaceuticals. “The approval of peramivir in Japan and the significant steps forward in our clinical programs demonstrate the substantial progress that BioCryst has made to date in 2010. We also remain focused on enrolling our Phase 3 peramivir studies and driving towards regulatory filing for the U.S. market.”

BCRX-4208 Gout Trial
•BioCryst today announces positive top-line results from its Phase 2a monotherapy BCX4208 gout study after completion of dose cohorts at 160 mg and 240 mg per day  

•In June 2010, BioCryst initiated enrollment in an additional blinded Phase 2 study to evaluate the efficacy and safety of BCX4208 alone and in combination with allopurinol, another urate-lowering treatment for gout  

“This Phase 2a, randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of orally administered BCX4208 in patients with gout is now completed, with positive top-line results in part two. Positive results from part one of this study were announced April 2010. The primary endpoint of the study was the change in serum uric acid (sUA) concentration at day 22, following 21 days of once-daily treatment, compared to baseline sUA concentration prior to treatment. Final data were evaluated using least square means (LSM) and an analysis of covariance (ANCOVA) model with factors for treatment and baseline sUA. 

All doses of BCX4208 evaluated met the primary endpoint of the study, including both doses studied in part two. BCX4208 doses of 160 mg and 240 mg per day showed LSM reductions in sUA levels of 3.6 and 4.5 mg/dL at day 22 (p<0.001 for both doses), compared to placebo reduction of 0.02 mg/dL. The LSM reduction of sUA concentration percent change from baseline was 35.7 percent for the 160 mg dose and 46.0 percent for the 240 mg dose (p<0.001 for both doses). BCX4208 also demonstrated a statistically significant difference in the proportion of subjects with sUA levels less than 6 mg/dL, compared to subjects treated with placebo, on day 22. The proportion of subjects achieving sUA levels less than 6 mg/dL was 47 percent for the 160 mg dose and 77 percent for the 240 mg dose, compared to zero percent in the placebo group. 

Part two of the study was designed to sequentially evaluate the safety and efficacy of up to three higher doses (160 mg, 240 mg and 320 mg once-daily) of BCX4208, and included various stopping criteria related to both safety and efficacy. Enrollment in the study was closed after the 240 mg treatment group achieved two efficacy stopping criteria: greater than 4 mg/dL reduction in sUA from baseline, and greater than 60 percent of patients achieving sUA concentration below 6 mg/dL. 

BCX4208 was generally safe and well-tolerated at all doses evaluated in this study. Reductions in peripheral blood lymphocytes were observed in patients treated with BCX4208. The protocol included individual subject stopping criteria for CD4+ cell counts below certain thresholds; no subjects were discontinued for this reason. Overall, the frequency of adverse events in each of the BCX4208 treatment groups was comparable to that observed in the placebo group. 

“This successful first evaluation of BCX4208 as monotherapy in gout patients provides valuable insights into dose-response, and demonstrates an appropriate efficacy-safety balance for short-term treatment,” said Dr. William P. Sheridan, Chief Medical Officer at BioCryst. “These results support continued evaluation of BCX4208 alone and in combination with allopurinol, as well as studies of longer-term administration.”

Other Clinical Developments & Outlook 
•The pivotal Phase 2 study for forodesine in the treatment of cutaneous T-cell lymphoma (CTCL) achieved its protocol-specified objective of enrolling 100 late-stage patients (Stage IIB to IVA) in January, and BioCryst expects to report data from the study in the second half of 2010.  

•The Phase 2 single-arm, open-label study evaluating 200 mg of forodesine twice-daily in patients with chronic lymphocytic leukemia (CLL) has reached its enrollment target of 26 patients and is ongoing. The Company expects to report data from this study in the second half of 2010.  

•Enrollment in the Phase 2 study to evaluate the efficacy and safety of BCX4208 alone and in combination with allopurinol in gout patients is proceeding, and the Company expects to announce top-line results from this study by the end of 2010.  

•The Phase 3 development program of i.v. peramivir is ongoing, with investigator sites enrolling patients in the southern hemisphere. Additional studies to provide further evidence of the efficacy of i.v. peramivir in patients with influenza are under discussion with the U.S. Food & Drug Administration and HHS.  

Second Quarter & 2010 YTD Financial Results 
For the three months ended June 30, 2010, total revenues increased to $7.6 million compared to $4.8 million for the three months ended June 30, 2009. This $2.8 million increase was driven primarily by higher revenue from the contract with the Department of Health & Human Services (HHS) for the continued development of intravenous (i.v.) peramivir.

Research and development (R&D) expenses increased to $14.7 million for the quarter from $11.2 million in the same quarter of last year. The $3.5 million increase resulted primarily from higher development costs associated with the BCX4208 program for the treatment of gout and the peramivir program for influenza. These increases in R&D expenses were partially offset by a decrease in development costs associated with the forodesine program. 

General and administrative (G&A) expenses increased to $3.2 million for the second quarter of 2010 from $2.3 million in the same quarter as last year. This increase was primarily due to higher consulting fees and personnel related costs. 

The Company’s net loss for the three months ended June 30, 2010 was $10.2 million, or $0.23 per share, compared to a net loss of $8.7 million, or $0.23 per share for the three months ended June 30, 2009. 

Year to Date Financial Results
For the six months ended June 30, 2010, total revenues increased to $33.7 million compared to $9.1 million for the six months ended June 30, 2009. This $24.6 million increase was driven primarily by a $9.8 million increase in revenue from the contract with HHS, as well as the receipt of a $7.0 million milestone payment from the Company’s partner, Shionogi & Co., Ltd. (Shionogi), and the sale of $6.4 million of peramivir active pharmaceutical ingredient (API) to collaborators Shionogi and Green Cross Corporation during the first quarter 2010. 

R&D expenses increased to $39.7 million for the first half of 2010 from $22.5 million in the same period as last year. The $17.2 million increase was primarily due to an increase of $7.4 million in development costs associated with the peramivir program, $6.3 million of manufacturing costs related to production of peramivir API for Shionogi and Green Cross, as well as higher development costs associated with the BCX4208 program. In addition, personnel related costs and general operating expenses were modestly higher during the first six months of 2010 as compared to the same period in 2009. These increases in R&D expenses were partially offset by lower development costs associated with the forodesine program. 

G&A expenses increased to $7.0 million for the six months ended June 30, 2010 from $4.8 million for the six months ended June 30, 2009, primarily due to increases in consulting fees and personnel related costs. 

The net loss for the six months ended June 30, 2010 was $12.8 million, or $0.29 per share, compared to a net loss of $18.0 million, or $0.47 per share for the six months ended June 30, 2009. 

As of June 30, 2010, the Company held cash, cash equivalents and securities of $81.2 million, a decrease of $13.1 million as compared to December 31, 2009. 

BioCryst expects its 2010 cash use to be within, but at the high end of, its previous guidance range of between $25 and $30 million. This is due in part to lower than expected royalty income as a result of the mild flu activity following approval in Japan. In response, the Company has taken action to reduce costs, while maintaining momentum within its clinical programs. This outlook may change depending on the timing of payments from HHS related to the peramivir program. 


  

BCRX Technical Analysis

Simple Moving Average

BCRX is below its 13 day moving average. This bearish trend appears to be reversing and BCRX is now crossing above the moving average.

Parabolic SAR

BCRX is trading below the 4.97 point that would trigger a reversal of the Parabolic SAR's current bearish indication. It appears the SAR and current uptrend in price will cross in the next few days, becoming a strong bullish sign.

MACD

Today BCRX's MACD began indicating a mild bullish signal with the MACD trending above the signal line. IF the current trend moves it above 0 it will be a strong bullish sign.

Stochastics

The Stochastic Oscillator is registering a bullish signal as the %K line is above the %D. However, BCRX is neither overbought nor oversold.

RSI

The RSI is currently at 38.57% which indicates that the stock is neither overbought nor oversold. Note the trend of the RSI is up indicating the internal strength of BCRX is improving.

 

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