BioCryst receives HHS contract to complete peramivir Phase 3 study in patients with influenza

BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX) announced that it has been awarded a $55.0 million contract modification by the U.S. Department of Health & Human Services (HHS) intended to fund to completion the Phase 3 development of its neuraminidase inhibitor, intravenous (i.v.) peramivir, for the treatment of patients hospitalized with influenza.

"The shared goal of HHS/BARDA and BioCryst is to achieve approval for peramivir for seriously-ill influenza patients. We value our long-standing relationship with HHS and their continued support," said Jon P. Stonehouse, President and Chief Executive Officer, BioCryst Pharmaceuticals. "This contract modification allows us to significantly increase the number of enrolling sites for our ongoing efficacy study and to drive it to completion. Additionally, the FDA and HHS have agreed to changes in the study that we believe greatly improve the likelihood of demonstrating an improvement over standard of care. Our first priority is to complete the Phase 3 program and we believe these changes should help us reach that goal."

This contract modification brings the total award from HHS to $234.8 million, providing funding through completion of Phase 3 development and the filing of a new drug application (NDA) for i.v. peramivir in the U.S. It also extends the contract term by 24 months through December 31, 2013. A change of indirect rates for prior years resulting from the contract modification has led to adjustments to BioCryst's financial results for 2010, as explained in detail below. In January 2007, BioCryst was originally awarded a $102.6 million, four-year contract from HHS to develop peramivir for the treatment of influenza. During 2009, peramivir clinical development for U.S. registration shifted to focus on intravenous delivery and the treatment of hospitalized influenza patients. To support this focus, a September 2009 contract modification was awarded to extend the program by 12 months and to increase funding by $77.2 million. Through December 31, 2010, $157.6 million has been recognized as revenue under the contract with HHS to support activities related to the peramivir development program.

Phase 3 Development of Peramivir

To improve the likelihood of a positive clinical outcome, BioCryst has amended the primary efficacy analysis of its multi-center, randomized, double-blind, controlled study to evaluate the efficacy and safety of 600 mg i.v. peramivir administered once-daily for five days in addition to standard of care (SOC), compared to SOC alone, in adults and adolescents who are hospitalized due to serious influenza. Implementation of the following is supported by the HHS contract modification:

• Changing the primary efficacy analysis of the study to focus on a subset of approximately 160 patients not treated with neuraminidase inhibitors as SOC, in order to provide the greatest opportunity to demonstrate a statistically significant peramivir treatment effect
• Increasing the total study target enrollment up to 600 subjects from the current target of 445 subjects
• Adding at least 45 more clinical site locations in additional countries

The actual time to reach completion of enrollment will depend on the prevalence and severity of influenza, as well as the ability of the more than 265 investigator sites to successfully enroll patients. Further details regarding this Phase 3 study is available at: http://clinicaltrials.gov/ct2/show/NCT00958776

Resulting Adjustment to 2010 Financial Results

In connection with the contract modification, HHS and BioCryst agreed to settle on final indirect rates for years 2007, 2008 and 2009. As a result, BioCryst will receive a $4.9 million cash payment from HHS related to the difference between the actual indirect costs incurred against the contract and the indirect costs that were invoiced at a provisional billing rate during those years. In order to reach agreement regarding the modification, the Company agreed to reductions of approximately $1.1 million of indirect costs relating to 2008 and 2009. As this subsequent event occurred after BioCryst's release of fourth quarter and full year 2010 financial results but prior to issuance of its annual financial statements to be included in Form 10-K, the Company will adjust the financial results previously reported in its February 10, 2011 press release. Accordingly, collaborative and other research and development revenues for the three and twelve months ended December 31, 2010 will be reduced to $17.4 million and $62.1 million, respectively. Net loss and loss per share for the three months ended December 31, 2010 will increase to $10.2 million and $0.23 per share. Net loss and loss per share for the twelve months ended December 31, 2010 will increase to $33.9 million and $0.76 per share. Receivables from collaborations, total assets, and stockholders' equity as of December 31, 2010 will be reduced to $30.2 million, $109.4 million and $65.5 million, respectively. Accumulated deficit as of December 31, 2010 will increase to $296.6 million. An adjusted financial table is available at: http://investor.shareholder.com/biocryst/releases.cfm

Source: http://www.biocryst.com/