BioCryst fourth quarter revenues decrease to $5.2 million

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) announced financial results for the fourth quarter and full year ended December 31, 2011.

"As we move forward into 2012, BioCryst has the most promising pipeline in its history. Our portfolio is balanced with both late- and early-stage assets, including a Phase 3 influenza program that is fully funded by the U.S. Government, a Phase-3-ready treatment for gout, as well as two highly innovative, BioCryst-discovered, potential treatments for Hepatitis C and hereditary angioedema. These novel compounds are on track to advance into clinical trials by the end of this year," said Jon P. Stonehouse, President & Chief Executive Officer of BioCryst. "We have entered 2012 with a solid balance sheet and a combination of development assets that together have the potential to generate significant value for BioCryst's shareholders."

Fourth Quarter Financial Results

For the three months ended December 31, 2011, revenues decreased to $5.2 million from $16.7 million in last year's quarter, primarily due to a $9.0 million decrease in collaboration revenue from the Department of Health and Human Services/Biomedical Advanced Research and Development Authority (HHS/BARDA) under the contract for the continued development of peramivir. This decrease resulted primarily from the completion of peramivir clinical trials in 2010.

Fourth quarter 2011 research and development expenses decreased to $14.1 million from $24.1 million in the fourth quarter of 2010. This decrease was primarily due to lower development costs associated with the peramivir and forodesine clinical programs following the completion of various clinical trials during 2010, partially offset by higher BCX4208 gout development costs associated with that program.

General and administrative expenses for the fourth quarter of 2011 decreased to $2.2 million compared to $2.9 million in last year's quarter, primarily due to lower third-party professional expenses and the transition of the Company's headquarters to North Carolina.

During the fourth quarter 2011, the Company incurred financing costs associated with its non-dilutive peramivir royalty monetization transaction completed in the first quarter of 2011. These costs relate to a $1.1 million mark-to-market loss on its foreign currency hedge, resulting from changes in the U.S. dollar/yen exchange rate and $1.2 million in interest expense related to the non-recourse notes issued in conjunction with the financing transaction.

The net loss for the fourth quarter 2011 was $13.2 million, or $0.29 per share, compared to a net loss of $10.2 million, or $0.23 per share, for the fourth quarter 2010.

Full Year 2011 Financial Results

For the year ended December 31, 2011, total revenues were $19.6 million, reflecting a $42.7 decrease from 2010 revenue of $62.4 million. Total 2011 revenue decreased from 2010 due to a $25.4 million decrease in HHS/BARDA collaboration revenue, as well as a $7.0 million milestone payment from Shionogi & Co., Ltd., and the sale of $8.3 million of peramivir active pharmaceutical ingredient (API) to Shionogi and Green Cross Corporation, all of which occurred in 2010 and did not recur in 2011.

Research and development expenses decreased to $56.9 million for 2011 from $83.9 million in 2010, primarily due to lower development costs associated with the peramivir and forodesine clinical programs following the completion of various clinical trials in 2010. Additionally, research and development expenses in the same period last year included $8.2 million of manufacturing costs related to production of peramivir API for collaborators Shionogi and Green Cross Corp. This API expense did not recur in 2011.

General and administrative expenses of $12.3 million in 2011 were slightly lower than $12.8 million in 2010.

During 2011, the Company realized financing costs associated with its peramivir royalty monetization transaction noted above, including a $4.0 million mark-to-market loss on its foreign currency hedge, resulting from changes in the U.S. dollar/yen exchange rate and $3.8 million in interest expense related to the notes issued in conjunction with the transaction.

The net loss for the year ended December 31, 2011 was $56.9 million, or $1.26 per share, compared to a net loss of $33.9 million, or $0.76 per share, for 2010.

Cash, cash equivalents and investments totaled $57.7 million at December 31, 2011 as compared to $66.3 million at December 31, 2010. Net operating cash use for the recent quarter was $4.8 million and $29.8 million for the full year 2011. Actual operating cash utilization was below the Company's 2011 guidance of $35 million as a result of strong working capital management and tight expense control. Operating cash use for the three and twelve months ending December 31, 2011 excludes proceeds from royalty monetization and other non-routine cash inflows, as well as $0.5 million and $3.5 million, respectively, in cash used as hedge collateral.

Clinical Development Update & Outlook

• Yesterday BioCryst announced positive preclinical results for BCX5191, a potent and selective nucleoside analog targeting RNA polymerase for the potential treatment of hepatitis C. BioCryst expects to complete toxicology and other preclinical studies, and to be ready to file for first-in-human studies during the fourth quarter of 2012.
• In January 2012, BioCryst announced positive long-term results from the extension phase of its randomized Phase 2b study of BCX4208 added to allopurinol in patients with gout who had failed to reach the serum uric acid (sUA) therapeutic goal of <6 mg/dL on allopurinol alone. The results of this 24-week, blinded safety extension confirm that BCX4208 was generally safe and well-tolerated, and sustained sUA control over time. These results are consistent with the previously reported positive findings at the 12-week primary efficacy time point. In a sub-study to assess responses to a vaccine challenge after 16 or 20 weeks of BCX4208 treatment, patients generated a healthy immune response.
• BioCryst is preparing for upcoming BCX4208 end of Phase 2 regulatory discussions. In addition, the Company is actively evaluating potential partners to fund Phase 3 development and commercialization.
• BioCryst continues to enroll patients in the ongoing Phase 3 efficacy study of the influenza antiviral i.v. peramivir. The Company plans to provide an update following the planned interim analysis, which has been amended to include an assessment of futility as well as a change in timing. This analysis is now scheduled to be conducted at the earlier of the following: the conclusion of the 2012 Southern Hemisphere flu season or reaching 70% of the current enrollment goal of 160 patients for the primary efficacy analysis population.
• The Company continues to advance BCX4161, a potent inhibitor of kallikrein for potential development as an oral, prophylactic treatment for hereditary angioedema to be ready to file for first-in-human studies during the second half of 2012.

Financial Outlook for 2012

Based upon current trends and assumptions, as well as the Company's planned operations, BioCryst expects net operating cash use to be in the range of $32 to $38 million, and expects its total operating expenses to be in the range of $57 to $69 million. The Company's operating cash forecast excludes any potential cash inflows from out-licensing or other sources. BioCryst's 2012 financial results will be heavily dependent on peramivir-related operating expenses, which are largely a function of the rate of enrollment in the Company's ongoing Phase 3 clinical trial, which in turn is dependent on the prevalence and severity of influenza in those geographies where BioCryst has clinical sites.