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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
-------- --------
Commission File Number 000-23186
BIOCRYST PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1413174
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
2190 Parkway Lake Drive; Birmingham, Alabama 35244
(Address and zip code of principal executive offices)
(205) 444-4600
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes X No
---- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 13,804,588 shares of the
Company's Common Stock, $.01 par value, were outstanding as of October 31,
1997.
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BIOCRYST PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information
Page No.
<S> <C>
Item 1. Financial Statements:
Condensed Balance Sheets -- September 30, 1997 and December 31, 1996..... 3
Condensed Statements of Operations--Three and Nine Months Ended
September 30, 1997 and 1996.............................................. 4
Condensed Statements of Cash Flows -- Nine Months Ended
September 30, 1997 and 1996.............................................. 5
Notes to Condensed Financial Statements................................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................... 6
Part II. Other Information
Item 1. Legal Proceedings......................................................... 16
Item 2. Changes in Securities..................................................... 16
Item 3. Defaults Upon Senior Securities........................................... 16
Item 4. Submission of Matters to a Vote of Security Holders....................... 16
Item 5. Other Information......................................................... 16
Item 6. Exhibits and Reports on Form 8-K.......................................... 16
Signatures........................................................................ 18
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BIOCRYST PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
September 30, 1997 and December 31, 1996
(In thousands, except per share)
<TABLE>
<CAPTION>
1997 1996
ASSETS (Unaudited) (Note 1)
--------- -----------
<S> <C> <C>
Cash and cash equivalents................................................... $ 5,582 $ 3,636
Securities held-to-maturity................................................. 19,286 24,229
Prepaid expenses and other current assets................................... 271 233
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Total current assets...................................................... 25,139 28,098
Securities held-to-maturity................................................. 2,786 7,920
Patents..................................................................... 69
Furniture and equipment, net................................................ 1,658 1,131
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Total assets.............................................................. $ 29,652 $ 37,149
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable............................................................ $ 573 $ 615
Accrued expenses............................................................ 251 241
Accrued taxes, other than income............................................ 199 210
Accrued vacation............................................................ 107 83
Current maturities of long-term debt........................................ 19
Current maturities of capital lease obligations............................. 83 219
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Total current liabilities................................................. 1,213 1,387
Capital lease obligations................................................... 36 59
Deferred license fee........................................................ 300 300
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Total liabilities......................................................... 1,549 1,746
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Stockholders' equity:
Convertible preferred stock, $.01 par value, shares
authorized--5,000; shares issued and outstanding--none
Common stock, $.01 par value, shares authorized--
45,000; shares issued and outstanding--
13,805 in 1997 and 13,697 in 1996......................................... 138 137
Additional paid-in capital................................................. 73,473 73,032
Accumulated deficit........................................................ (45,508) (37,766)
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Total stockholders' equity................................................ 28,103 35,403
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Total liabilities and stockholders' equity................................ $ 29,652 $ 37,149
--------- -----------
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</TABLE>
See accompanying notes to condensed financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
Periods Ended September 30, 1997 and 1996
(In thousands, except per share)
<TABLE>
<CAPTION>
Three Months Nine Months
-------------------- --------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
--------- --------- --------- ---------
Collaborative and other research and development........................... $ $ 37 $ 1,000 $ 1,558
Interest and other......................................................... 387 215 1,266 603
--------- --------- --------- ---------
Revenues................................................................. 387 252 2,266 2,161
--------- --------- --------- ---------
Research and development................................................... 2,399 2,221 7,830 5,635
General and administrative................................................. 491 520 2,138 2,083
Interest................................................................... 10 23 40 79
--------- --------- --------- ---------
Expenses................................................................. 2,900 2,764 10,008 7,797
--------- --------- --------- ---------
Net loss $(2,513) $(2,512) $(7,742) $(5,636)
--------- --------- --------- ---------
--------- --------- --------- ---------
Net loss per share (Note 2) $(.18) $(.23) $(.56) $(.54)
Weighted average shares outstanding (Note 2)............................... 13,805 10,846 13,770 10,348
</TABLE>
See accompanying notes to condensed financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1997 and 1996
(In thousands)
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Operating activities
Net loss $(7,742) $(5,636)
Depreciation and amortization............................................. 483 393
Non-monetary compensation................................................. 50
Changes in operating assets and liabilities, net.......................... (125) 20
--------- ---------
Net cash used by operating activities.................................... (7,334) (5,223)
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Investing activities
Purchases of furniture and equipment...................................... (1,010) (199)
Purchase of marketable securities......................................... (5,346) (10,579)
Maturities of marketable securities....................................... 15,423 7,245
--------- ---------
Net cash provided/(used) by investing activities......................... 9,067 (3,533)
--------- ---------
Financing activities
Principal payments on debt and capital lease obligations.................. (218) (202)
Proceeds of sale/leaseback................................................ 40
Proceeds from sale of common stock, net of issuance cost.................. 391 9,305
--------- ---------
Net cash provided by financing activities................................ 213 9,103
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Increase in cash and cash equivalents..................................... 1,946 347
Cash and cash equivalents at beginning of period.......................... 3,636 6,135
--------- ---------
Cash and cash equivalents at end of period................................ $ 5,582 $ 6,482
--------- ---------
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</TABLE>
See accompanying notes to condensed financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Basis of Preparation
The condensed balance sheet as of September 30, 1997 and the condensed
statements of operations and cash flows for the nine months ended September
30, 1997 and 1996 have been prepared in accordance with generally accepted
accounting principles by the Company and have not been audited. Such
financial statements reflect all adjustments which are, in management's
opinion, necessary to present fairly, in all material respects, the financial
position at September 30, 1997 and the results of operations and cash flows
for the nine months ended September 30, 1997 and 1996. These condensed
financial statements should be read in conjunction with the financial
statements for the year ended December 31, 1996 and the notes thereto
included in the Company's 1996 Annual Report. Interim operating results are
not necessarily indicative of operating results for the full year. The
balance sheet as of December 31, 1996 has been prepared from the audited
financial statements included in the previously mentioned Annual Report.
Note 2. Net Loss Per Share
Net loss per share is computed using the weighted average number of shares of
common stock outstanding. Common equivalent shares (from unexercised stock
options and warrants) have been excluded from the computation as their effect
is anti-dilutive. Because of this exclusion in computing net loss per share,
the adoption of Statement of Financial Accounting Standards No. 128, Earnings
per Share, is not expected to have a material impact on the Company's
reporting in 1998.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Quarterly Report on Form 10-Q contains certain statements of a
forward-looking nature relating to future events or the future financial
performance of the Company. Such statements are only predictions and the
actual events or results may differ materially from the results discussed in
the forward-looking statements. Factors that could cause or contribute to
such differences include those discussed below as well as those discussed in
other filings made by the Company with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
Overview
Since its inception in 1986, the Company has been engaged in research and
development activities (including drug discovery, manufacturing compounds,
conducting preclinical studies and clinical trials) and organizational
efforts (including recruiting its scientific and management personnel),
establishing laboratory facilities, engaging its Scientific Advisory Board
and raising capital. The Company has not received any revenue from the sale
of pharmaceutical products and does not expect to receive such revenues to a
significant extent for at least several years, if at all. The Company has
incurred operating losses since its inception. The Company expects to incur
significant additional operating losses over the next several years and
expects such losses to increase as the Company's research and development and
clinical trial efforts expand.
Results of Operations (first nine months of 1997 compared to the first nine
months of 1996)
Revenues increased 4.9% to $2,266,000 in the first nine months of 1997 from
$2,161,000 in the first nine months of 1996. The increase in interest
income, primarily due to investing the proceeds from the Company's public
offering in September 1996, was partially offset by a decrease in
collaborative and other research and development, primarily due to the first
milestone payment in 1997 being less than the initial collaboration payment
in 1996 from Torii Pharmaceutical Co., Ltd. ("Torii").
Research and development expenses increased 39.0% to $7,830,000 in the first
nine months of 1997 from $5,635,000 in the first nine months of 1996. The
increase is primarily attributable to an increase in costs associated
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with conducting additional clinical trials (in 1997 the Company completed two
Phase III trials which are larger and more expensive than previous trials the
Company has conducted), an increase in personnel costs (generally due to
adding additional personnel) and an increase in consulting fees (consultants
were used to assist with the Phase III trial results). Preliminary results
of the two Phase III trials were announced in September. Those results did
not show statistical efficacy and the Company has ceased pursuing the topical
cream formulation of BCX-34. The Company is continuing its clinical trials
for an oral and an ointment formulation of BCX-34.
General and administrative expenses increased 2.6% to $2,138,000 in the first
nine months of 1997 from $2,083,000 in the first nine months of 1996. The
increase was in several categories, primarily increased personnel costs and
the fact that 1996 expenses were reduced by the reversal of a liability
recorded in 1995 for use taxes assessed that the Company successfully
contested in 1996, and was partially offset by decreased fees and taxes on
the Torii milestone in 1997 versus the fees and taxes on the Torii license in
1996.
Interest expense decreased 49.4% to $40,000 in the first nine months of 1997
from $79,000 in the first nine months of 1996. The decrease is due to a
decline in capitalized lease obligations, along with long-term debt,
resulting in lesser interest expense. The Company obtained most of its leases
in connection with the move to its new facilities in April 1992.
Liquidity and Capital Resources
Cash expenditures have exceeded revenues since the Company's inception.
Operations have principally been funded through public offerings of common
stock, private placements of equity and debt securities, equipment lease
financing, facility leases, collaborative and other research and development
agreements (including a license and options for licenses), research grants
and interest income. In addition, the Company has attempted to contain costs
and reduce cash flow requirements by renting scientific equipment or
facilities, contracting with third parties to conduct certain research and
development and using consultants. The Company expects to incur additional
expenses, resulting in significant losses, as it continues and expands its
research and development activities and undertakes additional preclinical
studies and clinical trials of compounds which have been or may be
discovered. The Company also expects to incur substantial administrative,
manufacturing and commercialization expenditures in the future as it seeks
Food and Drug Administration (the "FDA") approval for its compounds and
establishes its manufacturing capability under Good Manufacturing Practices
("GMP"), and substantial expenses related to the filing, prosecution,
maintenance, defense and enforcement of patent and other intellectual
property claims.
At September 30, 1997, the Company's cash, cash equivalents and securities
held-to-maturity were $27.7 million, a decrease of $8.1 million from December
31,1996 principally due to the net loss for the nine months ended September
30, 1997.
The Company has financed its equipment purchases primarily with lease lines
of credit. The Company currently has a $500,000 line of credit with its bank
to finance capital equipment. In January 1992, the Company entered into an
operating lease for its current facilities which, based on an extension
signed in March 1997, expires on July 31, 2000, with an option to lease for
an additional three years at current market rates. The March 1997 extension
also added 5,640 square feet of finished office space. The operating lease
requires the Company to pay monthly rent ($14,562 and escalating annually by
the change in the consumer price index, but no more than 6% nor less than
3%), and a pro rata share of operating expenses and real estate taxes in
excess of base year amounts.
At December 31, 1996, the Company had long-term capital lease and operating
lease obligations which provide for aggregate minimum payments of $434,561 in
1997, $205,233 in 1998 and $148,395 in 1999. The Company is required to
expend $6.0 million, of which approximately $4.5 million was expended through
September 30, 1997, over a period coinciding with funding by the Company to
The University of Alabama at Birmingham ("UAB") on its influenza
neuraminidase project in order to maintain a worldwide license from UAB.
The Company entered into an exclusive license agreement with Torii under
which Torii paid the Company $1.5 million in license fees and made a $1.5
million equity investment in the Company in 1996. A milestone payment of $1.0
million was made in April 1997. While the license agreement provides for
potential milestone payments of up
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to $18.0 million and royalties on future sales of licensed products in Japan,
there can be no assurance that Torii will continue to develop the product in
Japan or that if it does so that it will result in meeting the milestones or
achieving future sales of licensed products in Japan.
The Company plans to finance its needs principally from its existing capital
resources and interest thereon, from payments under collaborative and
licensing agreements with corporate partners, through research grants, and to
the extent available, through lease or loan financing and future public or
private financings. The Company believes that its available funds will be
sufficient to fund the Company's operations at least through 1998. However,
this is a forward-looking statement, and no assurance can be given that there
will be no change that would consume available resources significantly before
such time. The Company's long-term capital requirements and the adequacy of
its available funds will depend upon many factors, including results of
research and development, results of product testing, relationships with
strategic partners, changes in the focus and direction of the Company's
research and development programs, competitive and technological advances and
the FDA regulatory process. Additional funding, whether through additional
sales of securities or collaborative or other arrangements with corporate
partners or from other sources, may not be available when needed or on terms
acceptable to the Company. Insufficient funds may require the Company to
delay, scale-back or eliminate certain of its research and development
programs or to license third parties to commercialize products or
technologies that the Company would otherwise undertake itself.
Certain Factors That May Affect Future Results, Financial Condition and the
Market Price of Securities
Early Stage of Development; Uncertainty of Product Development; Technological
Uncertainty
BioCryst is at an early stage of development. All of the Company's compounds
are in research and development, and no revenues have been generated from
sales of its compounds. It will be a number of years, if ever, before the
Company will recognize significant revenues from product sales or royalties.
To date, most of the Company's resources have been dedicated to the research
and development of pharmaceutical compounds based upon its purine nucleoside
phosphorylase ("PNP") program for the treatment of T-cell proliferative
diseases and disorders and for the development of inhibitors of influenza
neuraminidase and enzymes and proteins involved in the complement cascade.
The Company is conducting preclinical and clinical studies with its lead
drug, BCX-34, and results from these studies may not support future human
clinical testing or further development of the compound. Recently completed
Phase III trials with a cream formulation of BCX-34 for treatment of
Cutaneous T-Cell Lymphoma ("CTCL") and psoriasis did not show statistical
efficacy. Accordingly, the Company has discontinued further development of
the cream formulation of BCX-34, but is continuing its oral trials for BCX-34
and a Phase I trial for a topical ointment treatment for psoriasis. T-cell
proliferative diseases, as well as the other disease indications the Company
is studying, are highly complex and their causes are not fully known. The
Company's compounds under development will require significant additional,
time-consuming and costly research and development, preclinical testing and
extensive clinical testing prior to submission of any regulatory application
for commercial use. Product development of new pharmaceuticals is highly
uncertain, and unanticipated developments, clinical or regulatory delays,
unexpected adverse side effects or inadequate therapeutic efficacy could slow
or prevent product development efforts and have a material adverse effect on
the Company. BioCryst's lead drug, BCX-34, reversibly inhibits T-cell
activity, an essential component of the human immune system. In addition to
any direct toxicities or side effects the drug may cause, BCX-34, while
inhibiting T-cells, may compromise the immune system's ability to fight
infection. Although the Company will monitor immunosuppression during drug
dosing, there can be no assurance that the drug will not cause irreversible
immunosuppression. There can be no assurance that the Company's research or
product development efforts as to any particular compound will be
successfully completed, that the compounds currently under development will
be safe or efficacious, that required regulatory approvals can be obtained,
that products can be manufactured at acceptable cost and with appropriate
quality or that any approved products can be successfully marketed or will be
accepted by patients, health care providers and third-party payors. Few drugs
discovered by use of structure-based drug design have been successfully
developed, approved by the FDA or marketed. Within the pharmaceutical
industry, treatment of the disease indications being pursued by the Company,
especially T-cell proliferative diseases such as CTCL and psoriasis, have
proven difficult. There can be no assurance that drugs resulting from the
approach of structure-based drug design employed by the Company will overcome
the difficulties of drug discovery and development or result in commercially
successful products.
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Uncertainty Associated with Preclinical and Clinical Testing
Before obtaining regulatory approvals for the commercial sale of any of its
products, BioCryst must undertake extensive preclinical and clinical testing
to demonstrate their safety and efficacy in humans. The Company has limited
experience in conducting clinical trials. To date, the Company has conducted
initial preclinical testing of certain of its compounds and is testing oral
and topical ointment formulations of BCX-34 in various clinical trials. The
results of initial preclinical and clinical testing of compounds under
development by the Company are neither necessarily predictive of results that
will be obtained from subsequent or more extensive preclinical and clinical
testing nor necessarily acceptable to the FDA to support applications for
marketing permits. However, the Company recently completed two Phase III
trials of a topical cream formulation of BCX-34 which did not show
statistical efficacy. Even if the results of subsequent clinical tests are
positive, products, if any, resulting from the Company's research and
development programs are not likely to be commercially available for several
years. Additionally, the Company has made and may in the future make changes
to the formulation of its drugs and/or to the processes for manufacturing its
drugs. Any such future changes in formulation or manufacturing processes
could result in delays in conducting further preclinical and clinical
testing, in unexpected adverse events in further preclinical and clinical
testing, and/or in additional development expenses. Furthermore, there can be
no assurance that clinical studies of products under development will be
acceptable to the FDA or demonstrate the safety and efficacy of such products
at all or to the extent necessary to obtain regulatory approvals of such
products. Companies in the industry have suffered significant setbacks in
advanced clinical trials, even after promising results in earlier trials. The
failure to comply with data integrity (Good Clinical Practice ("GCP"))
requirements or to adequately demonstrate the safety and efficacy of a
therapeutic product under development could delay or prevent regulatory
approval of the product, and would have a material adverse effect on the
Company.
The rate of completion of clinical trials is dependent upon, among other
factors, the rate of enrollment of patients. Patient accrual is a function of
many factors, including the size of the patient population, the proximity of
patients to clinical sites, the eligibility criteria for the study and the
existence of competitive clinical trials. Delays in planned patient
enrollment in the Company's current trials or future clinical trials may
result in increased costs and/or program delays which could have a material
adverse effect on the Company.
Government Regulation; No Assurance of Product Approval
The research, testing, manufacture, labeling, distribution, advertising,
marketing and sale of drug products are subject to extensive regulation by
governmental authorities in the United States and other countries. Prior to
marketing, compounds developed by the Company must undergo an extensive
regulatory approval process required by the FDA and by comparable agencies in
other countries. This process, which includes preclinical studies and
clinical trials of each compound to establish its safety and effectiveness
and confirmation by the FDA that good laboratory, clinical and manufacturing
practices were maintained during testing and manufacturing, can take many
years, requires the expenditure of substantial resources and gives larger
companies with greater financial resources a competitive advantage over the
Company. To date, no compound or drug candidate being evaluated by the
Company has been submitted for approval to the FDA or any other regulatory
authority for marketing, and there can be no assurance that any such product
or compound will ever be approved for marketing or that the Company will be
able to obtain the labeling claims desired for its products or compounds. The
Company is and will continue to be dependent upon the laboratories and
medical institutions conducting its preclinical studies and clinical trials
to maintain both good laboratory and good clinical practices and, except for
the formulating and packaging of small quantities of its drug formulations
which the Company is currently undertaking, upon the manufacturers of its
compounds to maintain compliance with current GMP requirements. Data obtained
from preclinical studies and clinical trials are subject to varying
interpretations which could delay, limit or prevent FDA regulatory approval.
Delays or rejections may be encountered based upon changes in FDA policy for
drug approval during the period of development and FDA regulatory review.
Similar delays also may be encountered in foreign countries. Moreover, even
if approval is granted, such approval may entail commercially unacceptable
limitations on the labeling claims for which a compound may be marketed. Even
if such regulatory approval is obtained, a marketed drug or compound and its
manufacturer are subject to continual review and inspection, and later
discovery of previously unknown problems with the product or manufacturer may
result in restrictions or sanctions on such product or manufacturer,
including withdrawal of the product from the market, and other enforcement
actions.
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In June 1995 the Company notified the FDA that it had submitted incorrect
efficacy data to the FDA pertaining to its Phase II dose-ranging studies of
BCX-34 for CTCL and psoriasis. The FDA inspected the Company in November 1995
in relation to a study involving the topical application of BCX-34 concluded
in early 1995, and in June 1996 the FDA inspected the Company and one of its
clinical sites in relation to a Phase II dose-ranging study of BCX-34 for
CTCL and a Phase II dose ranging study for psoriasis, both of which were
concluded in early 1995. After each inspection, the FDA issued to the Company
a Form FDA 483 setting forth certain deficient GCP procedures followed by the
Company, some of which resulted in submission to the FDA of efficacy data
which reported false statistical significance. The FDA also issued a Form FDA
483 to the principal investigator at one of the Company's clinical sites
citing numerous significant deficiencies in the conduct of the Phase II
dose-ranging studies of BCX-34 for CTCL and psoriasis. These deficiencies
included improper delegations of authority by the principal investigator,
failures to follow the protocols, institutional review board deviations, and
discrepancies or deficiencies in documentation and reporting. As a
consequence of the FDA inspections and such resulting Form FDA 483s, the
Company's ongoing clinical studies are likely to receive increased scrutiny
since the same clinical site which received the Form FDA 483 is involved in
the Company's oral trials; this may delay the regulatory review process or
require the Company to increase the number of patients at other sites to
obtain approval (which can not be assured on a timely basis or at all). The
Company has adjusted certain of its procedures, but there can be no assurance
that the FDA will find such adjustments to be in compliance with FDA
requirements or that, even if it does find such adjustments to be in
compliance, it will not seek to impose administrative, civil or other
sanctions in connection with the earlier studies. Administrative sanctions
could include refusing to accept earlier studies and requiring the Company to
repeat one or more clinical studies, which would be the only studies the FDA
would accept for purposes of substantive scientific review of any New Drug
Application ("NDA") by the agency.
Such sanctions or other government regulation may delay or prevent the
marketing of products being developed by the Company, impose costly
procedures upon the Company's activities and confer a competitive advantage
to larger companies or companies that are more experienced in regulatory
affairs and that compete with the Company. There can be no assurance that FDA
or other regulatory approval for any products developed by the Company will
be granted on a timely basis, or at all. Delay in obtaining or failure to
obtain such regulatory approvals will materially adversely affect the
marketing of any products which may be developed by the Company, as well as
the Company's results of operations.
History of Operating Losses; Accumulated Deficit; Uncertainty of Future
Profitability
BioCryst, to date, has generated no revenue from product sales and has
incurred losses since its inception. As of September 30, 1997, the Company's
accumulated deficit was approximately $45.5 million. Losses have resulted
principally from costs incurred in research activities aimed at discovering,
designing and developing the Company's pharmaceutical product candidates and
from general and administrative costs. These costs have exceeded the
Company's revenues, which to date have been generated primarily from
collaborative arrangements, licenses, research grants and from interest
income. The Company expects to incur significant additional operating losses
over the next several years and expects such losses to increase as the
Company's research and development and clinical trial efforts expand. The
Company's ability to achieve profitability depends upon its ability to
develop drugs and to obtain regulatory approval for its products, to enter
into agreements for product development, manufacturing and commercialization,
and to develop the capacity to manufacture, market and sell its products.
There can be no assurance that the Company will ever achieve significant
revenues or profitable operations.
Additional Financing Requirements; Uncertainty of Additional Funding
The Company has incurred negative cash flows from operations in each year
since its inception. The Company expects that the funding requirements for
its operating activities will increase substantially in the future due to
expanded research and development activities (including preclinical studies
and clinical trials), the development of manufacturing capabilities and the
development of marketing and distribution capabilities. The Company
anticipates that its capital resources are adequate to satisfy its capital
requirements at least through 1998. However, this is a forward-looking
statement, and no assurance can be given that there will be no change that
would consume available resources significantly before such time. The
Company's future capital requirements will depend on many factors, including
continued scientific progress in its research, drug discovery and development
programs, the
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magnitude of these programs, progress with preclinical studies and clinical
trials, prosecuting and enforcing patent claims, competing technological and
market developments, changes in existing collaborative research or
development relationships, the ability of the Company to establish additional
collaborative relationships, and the cost of manufacturing scale-up and
effective marketing activities and arrangements. The Company anticipates,
based on its current business plan, that it will be necessary to raise
additional funds in 1999 or earlier. Additional funds, if any, may possibly
be raised through financing arrangements or collaborative relationships
and/or the issuance of preferred or common stock or convertible securities,
on terms and prices significantly more favorable than those of the currently
outstanding Common Stock, which could have the effect of diluting or
adversely affecting the holdings or rights of existing stockholders of the
Company. In addition, collaborative arrangements may require the Company to
transfer certain material rights to such corporate partners. If adequate
funds are not available, the Company will be required to delay, scale back or
eliminate one or more of its research, drug discovery or development programs
or attempt to obtain funds through arrangements with collaborative partners
or others that may require the Company to relinquish some or all of its
rights to certain of its intellectual property, product candidates or
products. No assurance can be given that additional financing will be
available to the Company on acceptable terms, if at all.
Competition
The Company is engaged in the pharmaceutical industry, which is characterized
by extensive research efforts, rapid technological progress and intense
competition. There are many public and private companies, including
well-known pharmaceutical companies, chemical companies, specialized
biotechnology companies and academic institutions, engaged in developing
synthetic pharmaceuticals and biotechnological products for human therapeutic
applications that represent significant competition to the Company. Existing
products and therapies and improvements thereto will compete directly with
products the Company is seeking to develop and market, and the Company is
aware that other companies or institutions are pursuing development of new
drugs and technologies directly targeted at applications for which the
Company is developing its drug compounds. Many of the Company's competitors
have substantially greater financial and technical resources and production
and marketing capabilities and experience than does the Company. The Company
has granted Novartis Pharmaceuticals Corporation, formerly Ciba-Geigy
Corporation, ("Novartis"), a worldwide exclusive license to several compounds
in the Company's sixth group of PNP inhibitors. Such arrangement with
Novartis does not include BCX-34 or most of the Company's other compounds. No
assurance can be given that Novartis will or will not develop compounds under
such arrangements, will be able to obtain FDA approval for any licensed
compounds, that any such licensed compounds if so approved will be able to be
commercialized successfully, or that the Company will realize any revenues
pursuant to such arrangements. If commercialized, these compounds could
compete directly against other compounds, including BCX-34, being developed
by the Company.
Many of the Company's competitors have significantly greater experience in
conducting preclinical studies and clinical trials of new pharmaceutical
products and in obtaining FDA and other regulatory approvals for health care
products. Accordingly, BioCryst's competitors may succeed in obtaining
approvals for their products more rapidly than the Company and in developing
products that are safer or more effective or less costly than any that may be
developed by the Company and may also be more successful than the Company in
the production and marketing of such products. Many of the Company's
competitors also have current GMP facilities and significantly greater
experience in implementing GMP or in obtaining and maintaining the requisite
regulatory standards for manufacturing. Moreover, other technologies are, or
may in the future become, the basis for competitive products. Competition may
increase further as a result of the potential advances from structure-based
drug design and greater availability of capital for investment in this field.
There can be no assurance that the Company's competitors will not succeed in
developing technologies and products that are more effective than any being
developed by the Company or that would render the Company's technology and
product candidates obsolete or noncompetitive.
Dependence on Collaborative Partners; Relationship with The University of
Alabama at Birmingham
The Company's strategy for research, development and commercialization of
certain of its products is to rely in part upon various arrangements with
corporate partners, licensees and others. As a result, the Company's products
are
11
<PAGE>
dependent in large part upon the subsequent success of such third parties in
performing preclinical studies and clinical trials, obtaining regulatory
approvals, manufacturing and marketing. The Company entered into an exclusive
license agreement with Torii in May 1996 to develop, manufacture and
commercialize in Japan BCX-34 and certain other PNP inhibitor compounds for
three indications. The Company has also entered into collaborative
arrangements with Novartis and intends to pursue additional collaborations in
the future. There can be no assurance that the Company will be able to
negotiate additional acceptable collaborative arrangements or that such
arrangements will be successful. No assurance can be given that the Company's
collaborative partners will be able to obtain FDA approval for any licensed
compounds, that any such licensed compounds, if so approved, will be able to
be commercialized successfully, or that the Company will realize any revenues
pursuant to such arrangements. Although the Company believes that parties to
collaborative arrangements generally have an economic motivation to succeed
in performing their contractual responsibilities, the amount and timing of
resources which they devote to these activities are not within the control of
the Company. There can be no assurance that such parties will perform their
obligations as expected or that current or potential collaborators will not
pursue treatments for other diseases or seek alternative means of developing
treatments for the diseases targeted by collaborative programs with the
Company or that any additional revenues will be derived from such
arrangements. If any of the Company's collaborators breaches or terminates
its agreement with the Company or otherwise fails to conduct its
collaborative activities in a timely manner, the development or
commercialization of the product candidate or research program under such
collaboration agreement may be delayed, the Company may be required to
undertake unforeseen additional responsibilities or to devote unforeseen
additional resources to such development or commercialization, or such
development or commercialization could be terminated. The termination or
cancellation of collaborative arrangements could also adversely affect the
Company's financial condition, intellectual property position and operations.
In addition, disagreements between collaborators and the Company have in the
past and could in the future lead to delays in the collaborative research,
development or commercialization of certain product candidates, or could
require or result in legal process or arbitration for resolution. These
consequences could be time-consuming, expensive and could have material
adverse effects on the Company.
The successful commercialization of the Company's compounds and product
candidates is also dependent upon the Company's ability to develop
collaborative arrangements with academic institutions and consultants to
support research and development efforts and to conduct clinical trials. The
Company's primary academic collaboration is with UAB. The Company is highly
dependent upon its collaborative arrangements with UAB to support its ongoing
research and development programs and the termination or cessation of such
relationship could have a material adverse effect upon the Company. There can
be no assurance that the Company's current arrangements with UAB will
continue or that the Company will be able to develop successful collaborative
arrangements with academic institutions and consultants in the future.
Uncertainty of Protection of Patents and Proprietary Rights
The Company's success will depend in part on its ability to obtain and
enforce patent protection for its products, preserve its trade secrets, and
operate without infringing on the proprietary rights of third parties, both
in the United States and in other countries. In the absence of patent
protection, the Company's business may be adversely affected by competitors
who develop substantially equivalent technology. Because of the substantial
length of time and expense associated with bringing new products through
development and regulatory approval to the marketplace, the pharmaceutical
and biotechnology industries place considerable importance on obtaining and
maintaining patent and trade secret protection for new technologies, products
and processes. To date, the Company has been issued seven United States
patents related to its PNP inhibitor compounds. One of these compounds is
under a patent issued to Warner-Lambert Company ("Warner-Lambert") and the
Company may require a license from Warner-Lambert to market a product
containing one or both of these compounds. The Company has the right of first
refusal to negotiate a license from Warner-Lambert for that compound,
however, there can be no assurance that such a license would be available or
obtainable on terms acceptable to the Company. A patent has also been issued
by the U.S. Patent and Trademark Office ("PTO") on a new process to prepare
BCX-34 and other PNP inhibitors and an additional patent application has been
filed for another new process to prepare BCX-34 and other PNP inhibitors. In
addition, one patent has issued by the PTO and two patent applications have
been filed with the PTO relating to inhibitors of influenza neuraminidase.
Also, two provisional United States patent applications have been filed with
the PTO on complement inhibitors. The Company has filed certain corresponding
foreign patent applications and
12
<PAGE>
intends to file additional foreign patent applications and additional United
States patent applications, as appropriate. There can be no assurance that
patents will be issued from such applications, that the Company will develop
additional products that are patentable or that present or future patents
will provide sufficient protection to the Company's present or future
technologies, products and processes. In addition, there can be no assurance
that others will not independently develop substantially equivalent
proprietary information, design around the Company's patents or obtain access
to the Company's know-how or that others will not successfully challenge the
validity of the Company's patents or be issued patents which may prevent the
sale of one or more of the Company's product candidates, or require licensing
and the payment of significant fees or royalties by the Company to third
parties in order to enable the Company to conduct its business. Legal
standards relating to the scope of claims and the validity of patents in the
fields in which the Company is pursuing research and development are still
evolving, are highly uncertain and involve complex legal and factual issues.
No assurance can be given as to the degree of protection or competitive
advantage any patents issued to the Company will afford, the validity of any
such patents or the Company's ability to avoid infringing any patents issued
to others. Further, there can be no guarantee that any patents issued to or
licensed by the Company will not be infringed by the products of others.
Litigation and other proceedings involving the defense and prosecution of
patent claims can be expensive and time consuming, even in those instances in
which the outcome is favorable to the Company, and can result in the
diversion of resources from the Company's other activities. An adverse
outcome could subject the Company to significant liabilities to third
parties, require the Company to obtain licenses from third parties or require
the Company to cease any related research and development activities or sales.
The Company's success is also dependent upon the skills, knowledge and
experience (none of which is patentable) of its scientific and technical
personnel. To help protect its rights, the Company requires all employees,
consultants, advisors and collaborators to enter into confidentiality
agreements which prohibit the disclosure of confidential information to
anyone outside the Company and requires disclosure and assignment to the
Company of their ideas, developments, discoveries and inventions. There can
be no assurance, however, that these agreements will provide adequate
protection for the Company's trade secrets, know-how or other proprietary
information in the event of any unauthorized use or disclosure or the lawful
development by others of such information.
The Company's management and scientific personnel have been recruited
primarily from other pharmaceutical companies and academic institutions. In
many cases, these individuals are continuing research in the same areas with
which they were involved prior to joining BioCryst and may be restricted by
agreement from disclosing to the Company trade secrets they learned
elsewhere. As a result, the Company could be subject to allegations of
violation of such agreements and similar claims and litigation regarding such
claims could ensue.
Dependence on Key Management and Qualified Personnel
The Company is highly dependent upon the efforts of its senior management and
scientific team. The loss of the services of one or more members of the
senior management and scientific team could significantly impede the
achievement of development objectives. Although the Company maintains, and is
the beneficiary of, a $2.0 million key-man insurance policy on the life of
Charles E. Bugg, Ph.D., Chairman of the Board of Directors and Chief
Executive Officer, the Company does not believe the proceeds would be
adequate to compensate for his loss. Due to the specialized scientific nature
of the Company's business, the Company is also highly dependent upon its
ability to attract and retain qualified scientific, technical and key
management personnel. There is intense competition for qualified personnel in
the areas of the Company's activities, and there can be no assurance that the
Company will be able to continue to attract and retain qualified personnel
necessary for the development of its existing business and its expansion into
areas and activities requiring additional expertise, such as production and
marketing. The loss of, or failure to recruit, scientific, technical and
managerial personnel could have a material adverse effect on the Company. In
addition, the Company relies on members of its Scientific Advisory Board and
consultants to assist the Company in formulating its research and development
strategy. All of the members of the Scientific Advisory Board and all of the
Company's consultants are employed by other employers, and each such member
or consultant may have commitments to, or consulting or advisory contracts
with, other entities that may limit their availability to the Company.
13
<PAGE>
Lack of Manufacturing, Marketing or Sales Capability
The Company has not yet manufactured or marketed any products and currently
does not have the facilities to manufacture its product candidates in
commercial quantities under GMP as prescribed and required by the FDA. To be
successful, the Company's products must be manufactured in commercial
quantities under GMP and at acceptable costs. Although the Company is
formulating and packaging under GMP conditions small amounts of certain drug
formulations which are the subject of preclinical studies and clinical
trials, the current facilities of the Company are not adequate for commercial
scale production. Therefore, the Company will need to develop its own GMP
manufacturing facility and/or depend on its collaborators, licensees or
contract manufacturers for the commercial manufacture of its products. The
Company has no experience in such commercial manufacturing and no assurance
can be given that the Company will be able to make the transition to
commercial production successfully or at an acceptable cost. In addition, no
assurance can be given that the Company will be able to make arrangements
with third parties to manufacture its products on acceptable terms, if at
all. The inability of the Company to manufacture or provide for the
manufacture of any products it may develop on a cost-effective basis would
have a material adverse effect on the Company.
The Company has no experience in marketing, distributing or selling
pharmaceutical products and will have to develop a pharmaceutical sales force
and/or rely on its collaborators, licensees or arrangements with others to
provide for the marketing, distribution and sales of any products it may
develop. There can be no assurance that the Company will be able to establish
marketing, distribution and sales capabilities or make arrangements with
collaborators, licensees or others to perform such activities.
Uncertainty of Third-Party Reimbursement and Product Pricing
Successful commercialization of any pharmaceutical products the Company may
develop will depend in part upon the availability of reimbursement or funding
from third-party health care payors such as government and private insurance
plans. There can be no assurance that third-party reimbursement or funding
will be available for newly approved pharmaceutical products or will permit
price levels sufficient to realize an appropriate return on the Company's
investment in its pharmaceutical product development. The U.S. Congress is
considering a number of legislative and regulatory reforms that may affect
companies engaged in the health care industry in the United States. Although
the Company cannot predict whether these proposals will be adopted or the
effects such proposals may have on its business, the existence and pendency
of such proposals could have a material adverse effect on the Company in
general. In addition, the Company's ability to commercialize potential
pharmaceutical products may be adversely affected to the extent that such
proposals have a material adverse effect on other companies that are
prospective collaborators with respect to any of the Company's pharmaceutical
product candidates.
Third-party payors are continuing their efforts to contain or reduce the cost
of health care through various means. For example, third-party payors are
increasingly challenging the prices charged for medical products and
services. Also, the trend toward managed health care in the United States and
the concurrent growth of organizations, such as health maintenance
organizations, which can control or significantly influence the purchase of
health care services and products, as well as legislative proposals to reform
health care or reduce government insurance programs, may result in lower
prices for pharmaceutical products. The cost containment measures that health
care providers are instituting and the effect of any health care reform could
materially adversely affect the Company's ability to sell its products if
successfully developed and approved.
Risk of Product Liability; Availability of Insurance
The Company's business may be affected by potential product liability risks
which are inherent in the testing, manufacturing and marketing of
pharmaceutical and other products under development by the Company. There can
be no assurance that product liability claims will not be asserted against
the Company, its collaborators or licensees. The use of products developed by
the Company in clinical trials and the subsequent sale of such products is
likely to cause BioCryst to bear all or a portion of those risks. The Company
does not have product liability insurance but does maintain coverage for
clinical trials in the amount of $6.0 million per occurrence and in the
aggregate. No assurance can be given that such insurance will be adequate to
cover claims made with respect to the clinical trials.
14
<PAGE>
There can be no assurance that the Company will be able to obtain or maintain
adequate product liability insurance on acceptable terms or that such
insurance will provide adequate coverage against potential liabilities.
Furthermore, there can be no assurance that any collaborators or licensees of
BioCryst will agree to indemnify the Company, be sufficiently insured or have
a net worth sufficient to satisfy any such product liability claims.
Hazardous Materials; Compliance with Environmental Regulations
The Company's research and development involves the controlled use of
hazardous materials, chemicals and various radioactive compounds. Although
the Company believes that its safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident,
the Company could be held liable for any damages that result and any such
liability could exceed the resources of the Company. The Company may incur
substantial costs to comply with environmental regulations if the Company
develops manufacturing capacity.
Control by Existing Management and Stockholders; Effect of Certain Anti-Takeover
Considerations
The Company's directors, executive officers and certain principal
stockholders and their affiliates own beneficially approximately 24.8% of the
Common Stock. Accordingly, such holders, if acting together, may have the
ability to exert significant influence over the election of the Company's
Board of Directors and other matters submitted to the Company's stockholders
for approval. The voting power of these holders may discourage or prevent any
proposed takeover of the Company unless the terms thereof are approved by
such holders. Pursuant to the Company's Composite Certificate of
Incorporation (the "Certificate of Incorporation"), shares of Preferred Stock
may be issued by the Company in the future without stockholder approval and
upon such terms as the Board of Directors may determine. The rights of the
holders of Common Stock will be subject to, and may be adversely affected by,
the rights of the holders of any Preferred Stock that may be issued in the
future. The issuance of Preferred Stock could have the effect of discouraging
a third party from acquiring a majority of the outstanding Common Stock of
the Company and preventing stockholders from realizing a premium on their
shares. The Company's Certificate of Incorporation also provides for
staggered terms for the members of the Board of Directors. A staggered Board
of Directors and certain provisions of the Company's by-laws and of Delaware
law applicable to the Company could delay or make more difficult a merger,
tender offer or proxy contest involving the Company.
Price Volatility
The securities markets have from time to time experienced significant price
and volume fluctuations that have often been unrelated to the operating
performance of particular companies. In addition, the market prices of the
common stock of many publicly traded emerging pharmaceutical and
biopharmaceutical companies have in the past been, and can in the future be
expected to be, especially volatile. Announcements of technological
innovations or new products by the Company or its competitors, developments
or disputes concerning patents or proprietary rights or collaboration
partners, achieving or failing to achieve development milestones, publicity
regarding actual or potential medical results relating to products under
development by the Company or its competitors, regulatory developments in
both U.S. and foreign countries, public concern as to the safety of
pharmaceutical products and economic and other external factors, as well as
period-to-period fluctuations in the Company's financial results, may have a
significant impact on the market price of the Common Stock.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None.
ITEM 2. CHANGES IN SECURITIES:
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
NONE
ITEM 5. OTHER INFORMATION:
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits:
NUMBER DESCRIPTION
3.1 Composite Certificate of Incorporation of Registrant.
Incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q
for the second quarter ending June 30, 1995 dated August 11, 1995.
3.2 Bylaws of Registrant. Incorporated by reference to
Exhibit 3.1 to the Company's Form 10-Q for the second quarter
ending June 30, 1995 dated August 11, 1995.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Composite
Certificate of Incorporation and Bylaws of the Registrant defining
rights of holders of Common Stock of the Registrant.
10.1 1991 Stock Option Plan, as amended and restated.
Incorporated by reference to Exhibit 99.1 to the Company's Form S-8
Registration Statement (Registration No. 333-30751).
10.2 Form of Notice of Stock Option Grant and Stock Option
Agreement. Incorporated by reference to Exhibit 99.2 and 99.3 to
the Company's Form S-8 Registration Statement (Registration No.
33-95062).
10.3 Warehouse Lease dated January 17, 1992 between Principal
Mutual Life Insurance Company and the Registrant. Incorporated by
reference to Exhibit 10.21 to the Company's Form S-1 Registration
Statement (Registration No. 33-73868).
10.4 Equipment Leases dated February 25, 1993, August 25,
1993, and November 25, 1993 between Ventana Leasing, Inc. and the
Registrant. Incorporated by reference to Exhibit 10.23 to the
Company's Form S-1 Registration Statement (Registration No.
33-73868).
10.5 Common Stock Purchase Warrants issued in connection with
the issuance of Series A Convertible Preferred Stock. Incorporated
by reference to Exhibit 10.32 to the Company's Form S-1
Registration Statement (Registration No. 33-73868).
10.6 Fourth Amended and Restated Registration Rights
Agreement among the Registrant and certain securityholders.
Incorporated by reference to Exhibit 10.35 to the Company's Form
S-1 Registration Statement (Registration No. 33-73868).
10.7 Common Stock Purchase Warrants issued in connection with
the issuance of Series B Convertible Preferred Stock. Incorporated
by reference to Exhibit 10.36 to the Company's Form S-1
Registration Statement (Registration No. 33-73868).
16
<PAGE>
10.8 Common Stock Purchase Warrants dated December 7, 1993 to
purchase 49,400 shares of Common Stock issued to each of John
Pappajohn, Lindsay A. Rosenwald and William M. Spencer.
Incorporated by reference to Exhibit 10.37 to the Company's Form
S-1 Registration Statement (Registration No. 33-73868).
10.9 Employment Agreement dated December 17 1996 between the
Registrant and Charles E. Bugg, Ph.D. Incorporated by reference to
Exhibit 10.11 to the Company's Form 10-K for the year ended
December 31, 1996 dated March 28, 1997.
10.10 Employment Agreement dated December 18, 1996 between the
Registrant and J. Claude Bennett. Incorporated by reference to
Exhibit 10.12 to the Company's Form 10-K for the year ended
December 31, 1996 dated March 28, 1997.
10.11# License Agreement dated April 15, 1993 between
Ciba-Geigy Corporation (now merged into Novartis) and the
Registrant. Incorporated by reference to Exhibit 10.40 to the
Company's Form S-1 Registration Statement (Registration No.
33-73868).
10.12 Employee Stock Purchase Plan. Incorporated by reference
to Exhibit 99.4 to the Company's Form S-8 Registration Statement
(Registration No. 33-95062).
10.13 First Amendment to Lease Agreement between Registrant
and Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to Exhibit 10.21
to the Company's Form 10-K for the year ending December 31, 1994
dated March 28, 1995.
10.14 Form of Stock Purchase Agreement dated May 1995 between
Registrant and various parties to purchase 1,570,000 shares of
common stock. Incorporated by reference to Exhibit 10.22 to the
Company's Form 10-Q for the second quarter ending June 30, 1995
dated August 11, 1995.
10.15 Form of Registration Rights Agreement dated May 1995
between Registrant and various parties. Incorporated by reference
to Exhibit 10.23 to the Company's Form 10-Q for the second quarter
ending June 30, 1995 dated August 11, 1995.
10.16 Form of Stock Purchase Agreement dated March 22, 1996
among Registrant and certain investors to purchase 1,000,000 shares
of common stock. Incorporated by reference to Exhibit 10.1 to the
Company's Form 8-K dated March 22, 1996.
10.17 Form of Registration Rights Agreement dated March 22,
1996 among Registrant and certain investors. Incorporated by
reference to Exhibit 10.2 to the Company's Form 8-K dated March 22,
1996.
10.18# License Agreement, dated May 31, 1996, between
Registrant and Torii Pharmaceutical Co., Ltd. (Torii). Incorporated
by reference to Exhibit 10.1 to the Company's Form 8-K/A dated May
3, 1996 and filed August 2, 1996.
10.19# Stock Purchase Agreement, dated May 31, 1996, between
Registrant and Torii. Incorporated by reference to Exhibit 10.2 to
the Company's Form 8-K/A dated May 3, 1996 and filed August 2, 1996.
10.20 Second Amendment to Lease Agreement between Registrant
and Principal Mutual Life Insurance Company, Inc. for
office/warehouse space.
27.1 Financial Data Schedule.
- ------------------------
# Confidential treatment granted.
(b) Reports on Form 8-K: None.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BIOCRYST PHARMACEUTICALS, INC.
Date: October 31, 1997 /s/ Charles E. Bugg
--------------------
Charles E. Bugg
Chairman and Chief Executive Officer
Date: October 31, 1997 /s/ Ronald E. Gray
--------------------
Ronald E. Gray
Chief Financial Officer and Chief
Accounting Officer
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the BioCryst
Pharmaceuticals, Inc. Financial Statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,582,104
<SECURITIES> 22,072,673
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25,139,331
<PP&E> 4,015,123
<DEPRECIATION> 2,357,498
<TOTAL-ASSETS> 29,652,335
<CURRENT-LIABILITIES> 1,213,791
<BONDS> 0
0
0
<COMMON> 138,046
<OTHER-SE> 27,964,994
<TOTAL-LIABILITY-AND-EQUITY> 29,652,335
<SALES> 0
<TOTAL-REVENUES> 2,265,510
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,051
<INCOME-PRETAX> (7,742,862)
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
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<NET-INCOME> (7,742,862)
<EPS-PRIMARY> (.56)
<EPS-DILUTED> (.56)
</TABLE>
