On February 27, 2017 BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) reported financial results for the fourth quarter and full year ended December 31, 2016 (Press release, BioCryst Pharmaceuticalsa, FEB 27, 2017, View Source [SID1234517846]). In a separate press release issued earlier today, BioCryst announced positive results from an interim analysis of its APeX-1 clinical trial of BCX7353 for the treatment of HAE attacks.

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Fourth Quarter Financial Results

For the three months ended December 31, 2016, total revenues increased to $9.0 million from $4.6 million in the fourth quarter of 2015. This increase, compared to the fourth quarter of 2015, resulted from higher peramivir royalty revenue and inventory sales to Seqirus, and was slightly offset by lower collaborative revenue in the fourth quarter of 2016.

Research and Development (R&D) expenses of $12.2 million decreased in the fourth quarter of 2016, as compared to R&D expense of $19.0 million in the fourth quarter of 2015. The decrease was due primarily to lower spending on the Company’s HAE portfolio of compounds associated with the discontinuation of avoralstat development in 2016.

Selling, general and administrative (SG&A) expenses of $2.6 million in the fourth quarter of 2016 decreased slightly from the $2.7 million in the fourth quarter of 2015.

Interest expense was $2.1 million for the fourth quarter of 2016 and $1.3 million in the fourth quarter of 2015. Also, a $5.7 million mark-to-market gain on the Company’s foreign currency hedge was recognized in the fourth quarter of 2016, compared to a $229,000 mark-to-market gain in the fourth quarter of 2015. These gains result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement.

The net loss for the fourth quarter of 2016 was $4 .5 million, or $0.06 per share, compared to a net loss of $18.1 million, or $0.25 per share for the fourth quarter of 2015.

2016 Financial Results

For the year ended December 31, 2016, total revenues decreased to $26.4 million from $48.3 million in 2015. The decrease in 2016 revenues, as compared to 2015, was primarily due to the RAPIVAB out-licensing transaction to Seqirus, which resulted in the recognition of $21.8 million of collaborative revenue in 2015 and a $4.0 million decrease in 2016 RAPIVAB product sales, as well as a reduction in collaboration revenue associated with lower galidesivir development activity in 2016. All of these decreases were slightly offset by a $7.3 million increase in 2016 peramivir royalty revenue derived from BioCryst’s commercial partners. A component of the peramivir royalty revenue was $5.7 million of Japanese government stockpiling revenue that is available for general corporate use. Although these orders provided a significant cash infusion, stockpiling royalty revenues may not recur on an annual basis as they are subject to the Japanese government’s appropriation and stockpiling process, which is difficult to predict.

R&D expenses decreased to $61.0 million for 2016 from $72.8 million for 2015. This decrease was primarily due to lower spending on the Company’s HAE portfolio of compounds associated with the discontinuation of avoralstat development in 2016.

SG&A expenses decreased to $11.3 million in 2016 from $13 .0 million in 2015, due primarily to lower unrestricted grants awarded to HAE patient advocacy groups, as well as a general reduction of administrative expenses.

Interest expense was $6.5 million in 2016 and $5.2 million in 2015. In addition, a $1.7 million mark-to-market loss on the Company’s foreign currency hedge was recognized in 2016, compared to a $564,000 million mark-to-market loss in 2015. These gains result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement. During 2016 and 2015, the Company also realized currency hedge gains of $811,000 in 2016 and $1.7 million in 2015 from the exercise of a U.S. Dollar/Japanese yen currency option.

The Company’s 2016 net loss increased to $55.1 million, or $0.75 per share, compared to a net loss of $43.0 million, or $0.59 per share for 2015.

Cash, cash equivalents and investments totaled $65.1 million at December 31, 2016 and represented a $35.8 million decrease from $100.9 million at December 31, 2015. Net operating cash use for 2016 was $61.9 million. In September 2016, the Company closed a $23 million senior credit facility that allowed it to extend its forecasted cash runway into 2018.

Clinical Development Update

On February 27th, the Company reported statistically significant and clinically meaningful reductions in attack frequency from an interim analysis of its ongoing APeX-1 clinical trial in patients with HAE.

On January 30th, the Company announced that the European Medicines Agency (EMA) accepted the Company’s filing of its peramivir Marketing Authorization Application (MAA) for treatment of symptoms typical of influenza in adults 18 years and older. The acceptance of the MAA begins the review process by the EMA under the centralized licensing procedure for all 28 member states of the European Union, Norway and Iceland.

On January 8th, the Company announced that Health Canada approved RAPIVAB (peramivir injection), for intravenous (I.V.) treatment of acute, uncomplicated influenza. Peramivir is being commercialized by Seqirus on a worldwide basis, excluding Japan, Taiwan, Korea and Israel.

On October 26, 2016, the Company announced positive results from a study of galidesivir (formerly BCX4430) administered to Rhesus monkeys infected with the Zika virus at a late-breaker oral presentation at IDWeek 2016 in New Orleans.
Financial Outlook for 2017

Based upon development plans and our awarded government contracts, BioCryst expects its 2017 net operating cash use to be in the range of $30 to $50 million, and its 2017 operating expenses to be in the range of $53 to $73 million. Our operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of the Company’s stock, as well as by vesting of the Company’s outstanding performance-based stock options.