BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) announced financial results for the fourth quarter and full year ended December 31, 2012.
"Our team is focused on achieving near-term milestones to rebuild shareholder value. Our primary goal is to advance our potentially ground-breaking oral kallikrein inhibitors for hereditary angioedema. Phase 1 clinical trials for the lead compound, BCX4161, are scheduled to begin in the next few months and we are finalizing lead optimization for our second generation compound," said Jon P. Stonehouse, President & Chief Executive Officer. "Furthermore, we are advancing BCX4430, a broad spectrum antiviral that could fill an important gap in the U.S. Government's medical countermeasure stockpile. Based on BCX4430's efficacy in treating various hemorrhagic fever viruses in animals, this compound could satisfy this important unmet need."
Fourth Quarter Financial Results
For the three months ended December 31, 2012, revenues decreased to $4.1 million, from $5.2 million in the fourth quarter of 2011. This decrease resulted primarily from a reduction in collaboration revenue from a contract with the Biomedical Advanced Research and Development Authority, within the U.S. Department of Health and Human Services (BARDA/HHS), for the development of peramivir.
Research and development (R&D) expenses for the fourth quarter of 2012 decreased to $11.1 million from $14.2 million in the fourth quarter of 2011. In 2012, lower development costs associated with the peramivir and ulodesine programs were partially offset by higher development costs associated with the preclinical BCX5191 and BCX4161 programs.
General and administrative (G&A) expenses for the fourth quarter of 2012 decreased to $1.9 million compared to $2.1 million in the fourth quarter of 2011, largely due to reductions in administrative expenses during 2012 associated with the continued realization of cost containment measures and the Company's restructuring of its operations. Fourth quarter 2012 expenses included a $1.8 million charge related to the corporate restructuring announced in December 2012.
Interest expense related to non-recourse notes was $1.2 million in the fourth quarter of 2012 and 2011. In addition, a $0.8 million mark-to-market gain on the Company's foreign currency hedge was recognized in the fourth quarter of 2012, compared to a $1.1 million mark-to-market loss in the fourth quarter of 2011. These hedge gains and losses resulted from changes in the U.S. dollar/Japanese yen exchange rate related to a foreign currency hedge arrangement entered into in conjunction with the RAPIACTA® royalty monetization transaction.
The net loss for the fourth quarter 2012 was $11.1 million, or $0.22 per share, compared to a net loss of $13.2 million, or $0.29 per share, for the fourth quarter 2011.
2012 Financial Results
For the year ended December 31, 2012, total revenues increased to $26.3 million from $19.6 million in 2011. The increase was due to the recognition of $7.8 million of previously deferred forodesine-related revenue in the first quarter 2012, as well as the recognition of $3.3 million royalty revenue from Shionogi & Co., Ltd. related to RAPIACTA® sales in the second half of 2012. The aggregate revenue increase was partially offset by a decrease in peramivir collaboration revenue from BARDA/HHS due to a reduction of peramivir development activity in 2012, as compared to 2011.
R&D expenses decreased to $51.5 million for 2012 from $57.2 million in 2011. A decrease in 2012 development costs related to the ulodesine and peramivir programs were partially offset by higher BCX5191 and BCX4161 development costs, as compared to 2011. Expenses for 2012 included the recognition of $1.9 million of non-cash, previously deferred expenses associated with the transfer of forodesine development activity to Mundipharma International Holdings Ltd. in the first quarter of 2012.
G&A expenses decreased significantly to $6.8 million in 2012 from $12.0 million in 2011, due to realization of cost containment measures, and the relocation of BioCryst's corporate headquarters in 2011. Total operating expenses decreased to $60.2 million in 2012 from $69.2 million in 2011.
The net loss for 2012 decreased to $39.1 million, or $0.79 per share, compared to a net loss of $56.9 million, or $1.26 per share for 2011.
Cash and investments totaled $37.1 million at December 31, 2012, a $20.6 million decrease from the $57.7 million balance at December 31, 2011. Net operating cash use for the fourth quarter of 2012 was $7.1 million and excludes $0.3 million of collateral received under the Company's foreign currency hedge arrangement. Net operating cash use for 2012 was $36.8 million, which was at the low end of BioCryst's net operating cash use guidance of $37 to $43 million, and total cash use was $38.5 million.
Clinical Development Update & Outlook
In December, BioCryst restructured its operations and implemented a focused R&D strategy to advance its hereditary angioedema (HAE) and antiviral programs. The restructuring and R&D focus significantly reduced BioCryst's future cost structure. The Company expects to reduce its operating cash burn by 30% to 40% and its operating expenses by 40% to 60% in 2013, as compared to 2012. These reductions enable the Company to extend its cash runway to achieve important near-term milestones in its oral HAE and broad spectrum antiviral programs.
In January, the Company announced the termination of its antiviral development program for treatment of the hepatitis C virus (HCV). Following seven days of treating HCV-infected animals with BCX5191, the viral load reduction observed was insufficient to justify continued development.
BioCryst plans to initiate its BCX4161 Phase 1 program for HAE around the end of the first quarter 2013. The main success factors for the BCX4161 Phase 1 clinical trial are to demonstrate safety, adequate and consistent drug exposure, and pharmacodynamic effects after oral administration. In addition, BioCryst has identified several second generation oral HAE compounds, and plans to select a lead candidate later in 2013.
Proof-of-principle data demonstrating that BCX4430 was efficacious and well tolerated in a preclinical yellow fever virus infection disease model was presented at the 2nd Antivirals Congress in Cambridge in November. BioCryst is continuing its collaboration with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) regarding filoviruses, while seeking additional U.S. Government funding for the further development of BCX4430. BioCryst expects to provide additional BCX4430 updates throughout 2013.
In November, the independent data monitoring committee (DMC) overseeing the peramivir Phase 3 clinical trial in hospitalized influenza patients informed the Company that the recalculated sample size for the clinical trial had crossed the pre-specified futility boundary of 320 subjects. Following this notification, BioCryst terminated the clinical trial, completed its analysis of the Phase 3 results and shared the data and findings with BARDA/HHS. In the coming months, the Company plans to have additional discussions with BARDA/HHS and the Food and Drug Administration to determine the future of the U.S. peramivir program.
Financial Outlook for 2013
Based upon current trends and assumptions, as well as the Company's restructured operations, BioCryst expects 2013 net operating cash use to be in the range of $22 to $26 million, and its 2013 operating expenses to be in the range of $25 to $35 million.