BIOCRYST PHARMACEUTICALS INC
S-3/A, 1999-10-12
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)
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<PAGE>

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 12, 1999



                                                      REGISTRATION NO. 333-87669

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------


                                AMENDMENT NO. 1
                                       TO


                                    FORM S-3

                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                             ---------------------

                         BIOCRYST PHARMACEUTICALS, INC.

             (Exact name of Registrant as specified in its Charter)

                            ------------------------

<TABLE>
<S>                                                 <C>
                     DELAWARE                                           62-1413174
         (State or other jurisdiction of                             (I.R.S. Employer
          incorporation or organization)                          Identification Number)
</TABLE>

               2190 PARKWAY LAKE DRIVE, BIRMINGHAM, ALABAMA 35244
                                 (205) 444-4600
              (Address, including zip code, and telephone number,
       including area code, of Registrant's principal executive offices)
                            ------------------------

                             CHARLES E. BUGG, PH.D.
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                         BIOCRYST PHARMACEUTICALS, INC.
                            2190 PARKWAY LAKE DRIVE
                           BIRMINGHAM, ALABAMA 35244
                                 (205) 444-4600
           (Name, address, including zip code, and telephone number,
             including area code, of agent for service of process)
                            ------------------------

                                   COPIES TO:


<TABLE>
<S>                                                 <C>
            RICHARD R. PLUMRIDGE, ESQ.                             JOHN W. WHITE, ESQ.
            LUCI STALLER ALTMAN, ESQ.                            CRAVATH, SWAINE & MOORE
            BRUCE E. CUNNINGHAM, ESQ.                                WORLDWIDE PLAZA
         BROBECK, PHLEGER & HARRISON LLP                            825 EIGHTH AVENUE
         370 INTERLOCKEN BLVD., SUITE 500                     NEW YORK, NEW YORK 10019-7475
            BROOMFIELD, COLORADO 80021                                (212) 474-1000
                  (303) 410-2000
</TABLE>


    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after this Registration Statement is declared effective.

    If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /


    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

                            ------------------------


    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
<PAGE>

                 SUBJECT TO COMPLETION, DATED OCTOBER 12, 1999


P R O S P E C T U S

                                2,000,000 SHARES

                                     [LOGO]

                                  COMMON STOCK
                                $      PER SHARE
                                   ---------


    We are selling 2,000,000 shares of our common stock. We have granted the
underwriters a 30-day option to purchase up to an additional 300,000 shares to
cover over-allotments, if any.



    Our common stock is quoted on the Nasdaq National Market under the symbol
"BCRX." The last reported sale price of our common stock on the Nasdaq National
Market on October 8, 1999 was $24.50 per share.


                                 --------------


    INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 6.


    Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

                                 --------------

<TABLE>
<CAPTION>
                                                                              PER SHARE         TOTAL
                                                                            --------------  --------------
<S>                                                                         <C>             <C>
Public Offering Price                                                       $               $
Underwriting Discount                                                       $               $
Proceeds to BioCryst (before expenses)                                      $               $
</TABLE>


    The underwriters expect to deliver the shares to purchasers on or about
      , 1999.


                                 --------------

SALOMON SMITH BARNEY

            HAMBRECHT & QUIST

                        RAYMOND JAMES & ASSOCIATES, INC.

      , 1999
<PAGE>
    YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
PROSPECTUS.

                                 --------------

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
Prospectus Summary.........................................................................................           3

Risk Factors...............................................................................................           6

Information Regarding Forward-Looking Statements...........................................................          15

Use of Proceeds............................................................................................          16

Market Price of Common Stock...............................................................................          16

Dividend Policy............................................................................................          16

Capitalization.............................................................................................          17

Dilution...................................................................................................          18

Selected Financial Data....................................................................................          19

Management's Discussion and Analysis of Financial Condition and Results of Operations......................          20

Business...................................................................................................          25

Management.................................................................................................          39

Principal Stockholders.....................................................................................          41

Relationships and Related Party Transactions...............................................................          43

Underwriting...............................................................................................          44

Legal Matters..............................................................................................          46

Experts....................................................................................................          46

Where You Can Find More Information........................................................................          47
</TABLE>


                                       2
<PAGE>
                               PROSPECTUS SUMMARY

    THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
YOU SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS"
SECTION. IN ADDITION, WE INCORPORATE BY REFERENCE IMPORTANT BUSINESS AND
FINANCIAL INFORMATION IN THIS PROSPECTUS.

OUR COMPANY


    BioCryst Pharmaceuticals, Inc. is a biotechnology company focused on the
development of pharmaceuticals for the treatment of infectious, T-cell related
and cardiovascular diseases and disorders. Our most advanced drug candidate,
BCX-1812, is designed to treat and prevent influenza. We licensed this drug
candidate to The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil
Pharmaceutical, Inc., both Johnson & Johnson companies. They have informed us
that the planning of Phase III trials for the 1999/2000 flu season is underway.



    We have two other drug development programs underway. The first program is
our purine nucleoside phosphorylase, or PNP, inhibitor program which we are
pursuing for the treatment of T-cell cancers. We are also developing a class of
compounds that may prevent or stop activation of complement proteins and may
therefore help in the treatment of cardiovascular diseases and disorders.



    An important element of our business strategy is to control costs and
overhead through contracting and partnering with third parties. We focus on the
discovery and early-stage development of our drug candidates and seek to
establish collaborative partnerships with pharmaceutical companies for the
later-stage development and commercialization of these compounds. This strategy
is designed to control our expenses, minimize risks and allow us to have a
greater number of attractive drug candidates progress to advanced-stage clinical
trials.



OUR FLU DRUG CANDIDATE (BCX-1812)



    Influenza, commonly known as the flu, is perceived by many people as a
transient, inconvenient viral infection that leaves its sufferers bed-ridden for
a few days. In truth, however, it is a virulent, acute respiratory disease that
is sometimes deadly. In North America, Western Europe and Japan, an estimated 70
million to 150 million individuals suffer from influenza annually. The flu is
particularly dangerous to the elderly, young children and debilitated patients
and accounts for approximately 20,000 deaths in the United States each year. The
flu and associated complications are the sixth leading cause of death in the
United States. The annual cost to the U.S. economy associated with influenza
epidemics was estimated to be in excess of $12 billion, according to a 1994
article in THE NEW ENGLAND JOURNAL OF MEDICINE.



    In collaboration with scientists from The University of Alabama at
Birmingham, we developed BCX-1812, our most advanced drug candidate. BCX-1812 is
designed to inhibit the influenza neuraminidase enzyme. This enzyme allows the
flu virus to replicate and spread throughout the body. By inhibiting this
enzyme, we believe that BCX-1812 may be effective in the treatment and
prevention of the flu.


    Our preclinical studies demonstrated that BCX-1812 has the following
benefits:

    - excellent safety profile;


    - inhibition of both influenza A and B;



    - effective when taken orally;



    - probable once-a-day dosage; and



    - can be made into a liquid form, allowing for use by the elderly and young
      children.


                                       3
<PAGE>

    In September 1998, we entered into an exclusive worldwide license agreement
with The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil, both
Johnson & Johnson companies. These Johnson & Johnson companies have sole
responsibility for the development, manufacture, marketing, sales and
distribution of BCX-1812. We received an initial $6.0 million payment from
Ortho-McNeil and an additional $6.0 million common stock equity investment from
Johnson & Johnson Development Corporation. In June 1999, we received a $2.0
million payment from Ortho-McNeil in connection with the initiation of Phase II
clinical testing in the United States. In addition, we may receive cash payments
upon specified developmental and regulatory milestones and royalties on any
product sales.



    Since the collaboration was established, BCX-1812 moved through Phase I
clinical trials and a Phase II clinical study by August 1999. We recently
announced preliminary results from a Phase II placebo-controlled, randomized
study conducted by The R.W. Johnson Pharmaceutical Research Institute for the
treatment of healthy volunteers infected with a strain of influenza A. The R.W.
Johnson Pharmaceutical Research Institute advised us that the data from this
Phase II study indicated a statistically significant reduction of flu virus in
the body and that the drug was well-tolerated at all dosage levels. They also
have advised us that the planning of the Phase III clinical trials for the
1999/2000 influenza season is underway.



    Our principal offices are located at 2190 Parkway Lake Drive, Birmingham,
Alabama 35244, and our telephone number is (205) 444-4600.


THE OFFERING


<TABLE>
<S>                                                  <C>
Common stock offered...............................  2,000,000 shares

Common stock to be outstanding after the
  offering.........................................  17,238,672 shares

Use of proceeds....................................  For research and development
                                                     activities, preclinical studies and
                                                     clinical trials, working capital and
                                                     general corporate purposes.

Nasdaq National Market symbol......................  "BCRX"
</TABLE>



    Unless we specifically state otherwise, the information in this prospectus
does not take into account the issuance of up to 300,000 shares of common stock
which the underwriters have the option to purchase solely to cover
over-allotments. If the underwriters exercise their over-allotment option in
full, 17,538,672 shares of common stock will be outstanding after the offering.



    The number of shares of common stock to be outstanding immediately after the
offering is based upon shares outstanding as of October 8, 1999 and does not
take into account 2,255,736 shares of common stock issuable upon exercise of
options outstanding at a weighted average exercise price of $7.52 per share and
595,707 shares reserved under our existing stock option plan and employee stock
purchase plan.


                                       4
<PAGE>
                             SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                                                        SIX MONTHS ENDED
                                                          YEARS ENDED DECEMBER 31,                          JUNE 30,
                                         ----------------------------------------------------------  -----------------------
                                            1994        1995        1996        1997        1998        1998        1999
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
                                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                      <C>         <C>         <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Collaborative and other research and
    development........................  $      269  $      223  $    1,558  $    1,000  $    6,371  $       --   $   2,408
  Interest and other...................         465         662       1,094       1,692       1,255         671         633
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
    Total revenues.....................         734         885       2,652       2,692       7,626         671       3,041
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
Expenses:
  Research and development.............       5,552       7,107       7,586      10,577       9,291       5,353       4,006
  General and administrative...........       1,904       2,210       2,664       2,682       3,105       1,295       1,683
  Interest.............................         216         144         100          52          15          10           3
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
    Total expenses.....................       7,672       9,461      10,350      13,311      12,411       6,658       5,692
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
Net loss...............................  $   (6,938) $   (8,576) $   (7,698) $  (10,619) $   (4,785) $   (5,987)  $  (2,651)
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
Net loss per share.....................  $    (1.02) $    (0.96) $    (0.69) $    (0.77) $    (0.34) $    (0.43)  $   (0.18)
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
                                         ----------  ----------  ----------  ----------  ----------  ----------  -----------
Weighted average shares outstanding....       6,787       8,905      11,171      13,780      14,120      13,926      14,981
</TABLE>

    The as-adjusted information that follows gives effect to this offering and
assumes no exercise of the underwriters' over-allotment option.


<TABLE>
<CAPTION>
                                                                                            JUNE 30, 1999
                                                                                        ----------------------
                                                                                         ACTUAL    AS ADJUSTED
                                                                                        ---------  -----------
                                                                                            (IN THOUSANDS)
<S>                              <C>        <C>        <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Cash, cash equivalents and securities held-to-maturity................................
                                                                                        $  24,317   $  69,827
Total assets..........................................................................
                                                                                           26,546      72,056
Accumulated deficit...................................................................
                                                                                          (55,821)    (55,821)
Total stockholders' equity............................................................
                                                                                           25,199      70,709
</TABLE>


                                       5
<PAGE>
                                  RISK FACTORS


    AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE YOU DECIDE TO BUY OUR COMMON
STOCK.



WE HAVE INCURRED SUBSTANTIAL LOSSES SINCE OUR INCEPTION IN 1986, EXPECT TO
CONTINUE TO INCUR SUCH LOSSES AND MAY NEVER BE PROFITABLE



    As of June 30, 1999, our accumulated deficit was approximately $55.8
million. We expect to incur additional losses for the foreseeable future, and we
expect our losses to increase as our research and development efforts progress.
To become profitable, we must successfully develop drug candidates, enter into
profitable agreements with collaborative partners and our drug candidates must
receive regulatory approval. The drug candidates must then be successfully
manufactured and marketed by our collaborative partners. It will be several
years, if ever, before we receive royalties under our existing license
agreements or any future license agreements. In addition, we never expect to
generate revenue directly from product sales.



WE ARE DEPENDENT ON THE R.W. JOHNSON PHARMACEUTICAL RESEARCH INSTITUTE AND
ORTHO-MCNEIL FOR SUBSTANTIALLY ALL OF OUR REVENUE



    Approximately 79.2% of our revenues for the six months ended June 30, 1999
and approximately 83.5% of our revenues for the year ended December 31, 1998
resulted from our exclusive worldwide license agreement with The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil. These revenues represent
approximately 45.0% of our total revenues since our inception in 1986.



    Under this agreement, they have the following rights that could delay or
stop the development of our flu drug candidate:


    - sole discretion on all elements of research and development of BCX-1812,
      including timing and design of further clinical trials;


    - sole responsibility to initiate and complete clinical trials, interpret
      data, prepare and file a new drug application, receive the approval of the
      U.S. Food and Drug Administration, or FDA, or foreign regulatory agencies
      and commercialize BCX-1812;



    - sole control over the amount of resources devoted to the research and
      development of BCX-1812; and



    - the right to terminate or cancel the agreement, which may be done at any
      time on four months notice.



    In addition, The R.W. Johnson Pharmaceutical Research Institute and
Ortho-McNeil have the right to subject us to penalties, including reducing their
royalty payments or forcing us to assign all of our interest in joint inventions
and patents to them if we breach this license agreement. Any changes to this
license agreement, including termination or failure to fulfill obligations would
materially and adversely affect our business, because most of our revenues are
derived from this license agreement.



IF OUR DRUG CANDIDATES DO NOT ACHIEVE BROAD MARKET ACCEPTANCE, OUR BUSINESS MAY
NEVER BECOME PROFITABLE



    Our drug candidates, even if approved for sale by the FDA or foreign
regulatory agencies, may not gain the market acceptance required for us to be
profitable. The degree of market acceptance of any drug candidates that we or
our partners develop will depend on a number of factors, including:



    - establishment and demonstration of the clinical efficacy and safety of our
      drug candidates;



    - cost-effectiveness of our drug candidates;



    - their effectiveness relative to alternative treatment methods, such as the
      efficacy, cost and ease of use of our flu drug candidate over other
      products, including vaccines, existing drugs such as


                                       6
<PAGE>

      amantadine and rimantadine, Hoffmann-La Roche's and Glaxo Wellcome's
      influenza neuraminidase inhibitors and over-the-counter products;



    - reimbursement policies of government and third-party payors; and



    - marketing and distribution support for our drug candidates.



    Physicians, patients, payors or the medical community in general may not
accept or use our drug candidates even after regulatory approval has been
obtained. If our drug candidates do not achieve significant market acceptance,
we will not have enough revenues to become profitable.



THE SUCCESS OF OUR DRUG DEVELOPMENT PROGRAMS DEPENDS SOLELY UPON THIRD PARTIES
FOR MANY OF THE CRITICAL STEPS IN THE DRUG DEVELOPMENT PROCESS



    We rely completely upon third parties for many important stages of our drug
development programs, including:



    - discovery of enzyme targets;



    - execution of preclinical studies and initial clinical trials for our
      compounds;



    - design and execution of late-stage clinical trials for our drug
      candidates;



    - development of our drug candidates;



    - obtaining regulatory approval for our drug candidates;



    - manufacturing of our drug candidates; and



    - sales, marketing and distribution of our drug candidates.



    Our failure to engage in successful collaborations at any one of these
stages would greatly impact our business. For example, if we were unable to
license enzyme targets from academic institutions or other biotechnology
companies on acceptable terms, our product development efforts would be
hampered. Similarly, if the contract research organizations that conduct our
initial clinical trials breached their obligations to us, this would delay or
prevent the development of our drug candidates.



    Even more critical to our success is our ability to enter into successful
collaborations for the late-stage clinical development, regulatory approval,
manufacture, marketing, sales and distribution of our drug candidates. Our
strategy is to rely upon third parties for all of these steps so that we can
focus exclusively on structure-based drug design, our core area of expertise.
This heavy reliance upon third-parties for these critical functions presents
several risks, including:



    - these third-party contracts may expire or be unilaterally terminated, as
      was the case with our Torii Pharmaceutical Co., Ltd. contract;



    - our collaborative partners may choose to pursue alternative technologies,
      including those of our competitors;



    - we may have disputes with a partner that could lead to litigation or
      arbitration;



    - our partners may not devote sufficient capital or resources towards our
      drug candidates; and



    - our partners may not comply with applicable government regulatory
      requirements.



    Any problems encountered with our third-party partners could delay or
prevent the development of our compounds, which would severely affect our
business.



CLINICAL TRIALS ARE UNPREDICTABLE AND OUR FAILURE TO SUCCESSFULLY IMPLEMENT AND
COMPLETE THEM WOULD HARM OUR BUSINESS



    To receive the regulatory approvals necessary for the sale of our drug
candidates, we or our collaborative partners must demonstrate through
preclinical studies and clinical trials that each drug candidate is safe and
effective. The clinical trial process is complex and uncertain. Positive results
from preclinical studies and early clinical trials do not ensure positive
results in pivotal clinical trials. Many


                                       7
<PAGE>

companies in our industry, including us, have suffered significant setbacks in
pivotal clinical trials, even after earlier clinical trials showed promising
results. Any of our drug candidates may produce undesirable side effects in
humans. These side effects could cause us or regulatory authorities to
interrupt, delay or halt clinical trials of a drug candidate. These side effects
could also result in the FDA or foreign regulatory authorities refusing to
approve the drug candidate for any targeted indications. We, the FDA or foreign
regulatory authorities may suspend or terminate clinical trials at any time if
we or they believe the trial participants face unacceptable health risks.
Clinical trials may fail to demonstrate that our drug candidates are safe or
effective.


    Clinical trials are lengthy and expensive. We incur substantial expense for,
and devote significant time to, preclinical testing and clinical trials, yet
cannot be certain that the tests and trials will ever result in the commercial
sale of a product. For example, clinical trials require adequate supplies of
drug and sufficient patient enrollment. Delays in patient enrollment can result
in increased costs and longer development times. Even if clinical trials are
successfully completed for our product candidates, our third-party licensees
might not file the required regulatory submissions in a timely manner and may
not receive regulatory approval for the drug candidate.


    In 1995 and 1996, the FDA inspected us and selected clinical sites relating
to certain clinical trials for the topical version of BCX-34. The FDA issued to
us two Lists of Inspectional Observations on Form FDA 483. These matters may
have a negative impact on our future relationships with the FDA, which could
delay clinical trials or any potential product approvals.



    The R.W. Johnson Pharmaceutical Research Institute has completed a Phase II
trial of BCX-1812, and we have been informed by The R.W. Johnson Pharmaceutical
Research Institute that the planning of the Phase III clinical trials of
BCX-1812 is underway. The FDA may not accept The R.W. Johnson Pharmaceutical
Research Institute's clinical protocols, the Phase III clinical trials may not
begin in 1999, or at all, and any Phase III clinical trials may not be
successful. Even if The R.W. Johnson Pharmaceutical Research Institute completes
the Phase III trials, we do not know when, if ever, it will receive FDA or
foreign regulatory agency approvals for, or when Ortho-McNeil will begin
marketing of, BCX-1812. If The R.W. Johnson Pharmaceutical Research Institute is
unable to begin clinical trials as planned, complete the clinical trials or
demonstrate the safety and efficacy of our compounds, our business will be
harmed because a significant amount of our future revenues are dependent upon
the success of BCX-1812. Even if the results of The R.W. Johnson Pharmaceutical
Research Institute's trials are positive, products are not likely to be
commercially available for several years, if at all.



IF WE OR OUR COLLABORATIVE PARTNERS DO NOT OBTAIN AND MAINTAIN GOVERNMENTAL
APPROVALS FOR OUR PRODUCTS UNDER DEVELOPMENT, WE OR OUR COLLABORATIVE PARTNERS
WILL NOT BE ABLE TO SELL THESE POTENTIAL PRODUCTS, WHICH WOULD SIGNIFICANTLY
HARM OUR BUSINESS



    All of our products under development will require regulatory approval by
the FDA before we or our collaborative partners are permitted to sell them in
the United States. Clinical trial data can be the subject of differing
interpretation. The FDA could interpret our clinical data differently than we or
our partners do. The FDA could also require additional clinical data to support
approval. The results from earlier-stage studies may not be predictive of
results obtained in later-stage trials.



    After we or our partners complete the clinical trials for a potential
product, we or our partners will be required to file a new drug application. The
submission of new drug applications and the approval processes on the part of
the FDA requires substantial time, expense and effort, and the FDA may not grant
approval on a timely basis, if at all. The FDA can take years to review new drug
applications and may take longer if significant questions are raised during the
review process. In addition, delays or rejections may be encountered during FDA
review. Moreover, it is possible that the current regulatory framework could
change or additional regulations could arise at any stage during our product
development, which may affect our ability to obtain approval of our compounds.
Even after


                                       8
<PAGE>

such time and expenditures, regulatory approval may not be obtained. Delays in
obtaining regulatory approvals may:


    - adversely affect the successful commercialization of any drug candidates
      that we and our collaborative partners develop;

    - impose costly procedures on our collaborative partners;

    - diminish any competitive advantages that we or our collaborative partners
      may attain; and

    - adversely affect our receipt of revenues or royalties.

Even if regulatory approval of a potential product is granted, the approval may
limit the indicated uses for which the potential product may be marketed and/or
may require post-marketing studies.


    The FDA regulates, among other things, the record-keeping and storage of
data pertaining to potential pharmaceutical products. We currently store all of
our preclinical research data at our facilities and do not store duplicate
copies off-site. We could lose important preclinical data if our facilities are
damaged.



    In order to market our potential products in countries outside of the United
States, we and our partners are required to obtain similar approvals from
foreign regulatory bodies. The process of obtaining these approvals is time
consuming and requires the expenditure of substantial resources, and we and our
collaborative partners may encounter similar delays, rejections, requests for
additional data, and other setbacks with regulatory authorities in other
countries just as we face in the United States.


    If we get approval to market our potential products, whether in the United
States or internationally, we will continue to be subject to extensive
regulatory requirements. These requirements are wide ranging and govern, among
other things:

    - adverse drug experience reporting regulations;

    - product promotion;

    - product manufacturing, including good manufacturing practice requirements;
      and

    - product changes or modifications.

    Loss of or changes to previously obtained approvals or our failure to comply
with existing or future regulatory requirements could have a material adverse
effect on our business.


    In June 1995, we notified the FDA that we submitted incorrect efficacy data
for our Phase II trials of topical BCX-34 for cutaneous T-cell lymphoma and
psoriasis. The FDA inspected us in November 1995 and issued to us a List of
Inspectional Observations, Form FDA 483, that cited our failure to follow good
clinical practices. In June 1996, the FDA inspected us and two of our 1995 Phase
II trials of topical BCX-34 for the treatment of cutaneous T-cell lymphoma and
psoriasis. As a result of the investigation, the FDA issued us a Form FDA 483,
which cited our failure to follow good clinical practices. Our ongoing and
future clinical studies or trials may receive increased scrutiny, which would
delay the regulatory review process. Also in June 1996, the FDA investigated one
of the clinical trial sites that participated in our 1995 Phase II dose-ranging
trials of topical BCX-34 for the treatment of cutaneous T-cell lymphoma and
psoriasis. As a result, the FDA issued a Form FDA 483 to the principal
investigator at the clinical site. In November 1997, the FDA notified us that
they would not accept work performed by this investigator without further
validation. The majority of the work performed by this investigator was for a
topical formulation of BCX-34 and was discontinued in 1997. Work performed by
this investigator for oral BCX-34, however, will not be accepted by the FDA in
any new drug application to support efficacy.


                                       9
<PAGE>

COMPETITIVE PRODUCTS FROM OTHER COMPANIES MAY RENDER SOME OR ALL OF OUR PRODUCT
CANDIDATES NONCOMPETITIVE OR OBSOLETE


    The biotechnology and pharmaceutical industries are highly competitive and
are subject to rapid and substantial technological change. Other products and
therapies that either currently exist on the market or are under development
could compete directly with some of the compounds that we are seeking to develop
and market. These other products may render some or all of our compounds under
development noncompetitive or obsolete.


    If our influenza neuraminidase inhibitor drug candidate, which is partnered
with The R.W. Johnson Pharmaceutical Research Institute and Ortho-McNeil,
receives FDA or foreign regulatory approval, we expect it to have substantial
competition from a number of existing and future therapies. Glaxo Wellcome plc's
influenza neuraminidase inhibitor has received approval from the FDA for
marketing in the United States and has received approval for marketing in
several other countries. Gilead Sciences, Inc., in collaboration with
Hoffmann-La Roche, Inc., also has an influenza neuraminidase inhibitor that is
under review by the FDA. If approved, our influenza neuraminidase inhibitor,
BCX-1812, will likely be the third neuraminidase inhibitor to the market. We
believe that this may provide marketing challenges. Both Glaxo-Wellcome and
Hoffmann-La Roche are large multinational pharmaceutical companies that have
significant financial, technical and human resources. In addition, current
therapies available for the treatment or prevention of flu include vaccines and
the drugs amantadine and rimantadine, as well as other over-the-counter
products. There is also a vaccine currently in preclinical development that may
immunize people against all strains of the flu virus, rendering flu drug
products like ours obsolete.


    There are numerous pharmaceutical and biotechnology companies and academic
institutions throughout the world engaged in research and development efforts
with respect to therapeutic products targeted at diseases or conditions
addressed by us. Many of these competitors may be able to develop products and
processes, in addition to those treatments that already exist, that are
competitive with, or superior to, our own for many reasons, because competitors
may have:

    - substantially greater financial, technical and human resources;

    - larger production and marketing capabilities;

    - greater experience in preclinical testing, clinical trials and other
      regulatory matters; and

    - entered into arrangements with, or acquired, biotechnology companies or
      technologies to enhance their capabilities.


    Products marketed by our competitors may prove to be more effective than our
own, and our products, if any, may not offer an economically feasible or
preferable alternative to existing therapies.



WE MAY FAIL TO ADEQUATELY PROTECT OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS OR
SECURE RIGHTS TO THIRD-PARTY PATENTS



    Our success will depend in part on our ability and the abilities of our
licensors to obtain patent protection for our products, methods, processes and
other technologies to preserve our trade secrets, and to operate without
infringing the proprietary rights of third parties. To date, we have been issued
nine U.S. patents for our various inventions. Additional patent applications and
provisional patent applications have been filed with the U.S. Patent and
Trademark Office. We have filed certain corresponding foreign patent
applications and intend to file additional foreign and U.S. patent applications,
as appropriate. We cannot assure you as to:


    - the degree and range of protection any patents will afford against
      competitors with similar products;

                                       10
<PAGE>
    - if and when patents will issue;

    - whether or not others will obtain patents claiming aspects similar to
      those covered by our patent applications;

    - whether or not others will design around our patents or obtain access to
      our know-how; or

    - the extent to which we will be successful in avoiding any patents granted
      to others.

    If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, we may be:

    - required to obtain licenses or redesign our products or processes to avoid
      infringement;

    - prevented from practicing the subject matter claimed in those patents; or

    - required to pay damages.


    For example, one of our compounds not currently under development may be
subject to a patent held by Warner-Lambert, if we market a product containing
this compound. We have obtained a right of first refusal to negotiate a license
from Warner-Lambert, but this license may not be available on acceptable terms.
Moreover, we may not be successful in any attempt to redesign our products or
processes to avoid infringement if we are unable to obtain such a license.



    Litigation or administrative proceedings, including interference proceedings
before the U.S. Patent and Trademark Office, related to intellectual property
rights could be brought against us or be initiated by us. Any judgement adverse
to us in any litigation or other proceeding arising in connection with a patent
or patent application could materially and adversely affect our business,
financial condition and results of operations. In addition, the costs of any
such proceeding may be substantial whether or not we are successful.


    Our success is also dependent upon the skills, knowledge and experience,
none of which is patentable, of our scientific and technical personnel. To help
protect our rights, we require all employees, consultants, advisors and
collaborators to enter into confidentiality agreements which prohibit the
disclosure of confidential information to anyone outside of our company and
require disclosure and assignment to us of their ideas, developments,
discoveries and inventions. We cannot assure you, however, that these agreements
will provide adequate protection for our 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.

WE ARE DEPENDENT ON OUR KEY PERSONNEL AND WILL NEED TO ATTRACT AND RETAIN
ADDITIONAL KEY PERSONNEL IN THE FUTURE

    We are highly dependent upon our senior management and scientific team, the
loss of whose services might impede the achievement of our development and
commercial objectives. Although we maintain, and are 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, we do not believe the
proceeds would be adequate to compensate for his loss. We are actively seeking
additional members for our senior management team. Competition for key personnel
with the experience that we require is intense and is expected to continue to
increase. If we are unable to attract and retain the required number of skilled
and experienced management, operational and scientific personnel, our business
will be harmed.

    In addition, we rely on members of our scientific advisory board and
consultants to assist us in formulating our research and development strategy.
All of the members of the scientific advisory board and all of our consultants
are otherwise employed and each such member or consultant may have commitments
to other entities that may limit their availability to us.

                                       11
<PAGE>

THE LACK OF REIMBURSEMENT FOR THE USE OF OUR PRODUCT CANDIDATES MAY LIMIT THEIR
USE, WHICH WOULD REDUCE OUR POTENTIAL REVENUES



    The lack of reimbursement for the use of our product candidates by
hospitals, clinics, patients or doctors will harm our business. Medicare,
Medicaid, health maintenance organizations and other third-party payors may not
authorize or otherwise budget for the reimbursement of our products.
Governmental and third-party payors are increasingly challenging the prices
charged for medical products and services. We cannot be certain that our product
candidates will be viewed as cost-effective, that reimbursement will be
available to consumers or that such reimbursement will be sufficient to allow
our product candidates to be marketed on a competitive basis. To the extent that
changes in reimbursement policies, or attempts to contain costs in the health
care industry, limit or restrict reimbursement for our product candidates, our
business would be materially and adversely affected.


WE MAY FACE CLINICAL TRIAL LIABILITY CLAIMS RELATED TO THE USE OR MISUSE OF OUR
COMPOUNDS IN CLINICAL TRIALS


    We face an inherent business risk of liability claims in the event that the
use or misuse of our compounds results in personal injury or death. We have not
experienced any clinical trial liability claims to date, but we may experience
such claims in the future. After commercial introduction of our products we may
experience losses due to product liability claims. We currently maintain
clinical trial liability insurance coverage in the amount of $1.0 million per
occurrence and $2.0 million in the aggregate, with an additional $5.0 million
potentially available under our umbrella policy. The insurance policy may not be
sufficient to cover claims that may be made against us. Clinical trial liability
insurance is expensive, difficult to obtain and may not be available in the
future on acceptable terms, if at all. Any claims against us, regardless of
their merit, could materially and adversely affect our financial condition.



IF OUR COMPUTER SYSTEMS FAIL, WE MAY BE HARMED MORE THAN OTHER COMPANIES



    Our drug development activities depend on the security, integrity and
performance of the computer systems supporting them. We currently store all of
our preclinical and clinical data at our facilities, do not store duplicate
copies of all data off-site and could lose important data if our systems were
impaired. Any significant degradation or failure of our computer systems could
cause our data to be inaccurately calculated or lost. Loss of data could result
in significant delays in our drug development process. We have not undertaken
formal system protections, do not have a detailed emergency plan and could be
harmed if any system failure occurs.


WE USE HAZARDOUS MATERIALS IN OUR BUSINESS AND ARE SUBJECT TO ENVIRONMENTAL
CONTROLS AND REGULATIONS

    Our research and development involves the controlled use of hazardous
materials, chemicals and various radioactive compounds. We are subject to
federal, state and local laws and regulations governing the use, storage,
handling and disposal of such materials and certain waste products. Accidental
contamination or injury from these materials could occur. In the event of such
an accident, we could be held liable for any damages that result and any such
liability could exceed our resources. We could be required to incur substantial
costs to comply with environmental laws and regulations, and if that were to
happen our business and results of operations could be materially and adversely
affected.

BECAUSE STOCK OWNERSHIP IS CONCENTRATED, YOU AND OTHER INVESTORS WILL HAVE
MINIMAL INFLUENCE ON STOCKHOLDER DECISIONS


    Prior to this offering, our directors, executive officers and certain
principal stockholders and their affiliates, including Johnson & Johnson
Development Corporation, own approximately 40.5% of our outstanding common
stock. As a result, these holders, if acting together, are able to significantly
influence matters requiring stockholder approval, including the election of
directors. Such concentration of ownership may have the effect of delaying,
deferring or preventing a change in our control.


                                       12
<PAGE>
WE HAVE ANTI-TAKEOVER PROVISIONS IN OUR CORPORATE CHARTER DOCUMENTS THAT MAY
RESULT IN OUTCOMES WITH WHICH YOU DO NOT AGREE

    Our board of directors has the authority to issue up to 5,000,000 shares of
undesignated preferred stock and to determine the rights, preferences,
privileges and restrictions of such shares without further vote or action by our
stockholders. 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 making it more difficult for third parties to acquire a majority of
our outstanding voting stock.

    In addition, our certificate of incorporation provides for staggered terms
for the members of the board of directors and super majority approval of the
removal of any member of the board of directors and prevents our stockholders
from acting by written consent. Our certificate also requires supermajority
approval of any amendment of these provisions. These provisions and certain
provisions of our by-laws and of Delaware law applicable to us could delay or
make more difficult a merger, tender offer or proxy contest involving us.

INVESTORS IN THIS OFFERING WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION


    You will incur immediate and substantial dilution in the net tangible book
value per share of the shares you purchase in this offering. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution.


OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE

    The market prices for securities of biotechnology companies in general have
been highly volatile and may continue to be highly volatile in the future. The
following factors, in addition to other risk factors described in this section,
may have a significant impact on the market price of our common stock:

    - announcements of technological innovations or new products by us or our
      competitors;

    - developments or disputes concerning patents or proprietary rights;


    - our collaborative partners achieving or failing to achieve development
      milestones;


    - publicity regarding actual or potential medical results relating to
      products under development by us or our competitors;

    - regulatory developments in both the United States and foreign countries;

    - public concern as to the safety of pharmaceutical products;

    - actual or anticipated fluctuations in our operating results;

    - changes in financial estimates or recommendations by securities analysts;

    - economic and other external factors or other disasters or crisis; and

    - period-to-period fluctuations in our financial results.


IF WE EXPERIENCE ANY PROBLEMS WITH YEAR 2000 COMPLIANCE, OUR OPERATIONS MAY BE
  DISRUPTED



    Beginning in the year 2000, the date fields coded in certain software
products and computer systems will need to accept four digit entries in order to
distinguish between years in the 1900s and years dated 2000 and higher (commonly
known as the year 2000 problem). It is not clear what potential problems may
arise as the biopharmaceutical industry, and other industries, try to resolve
this year 2000 problem.


                                       13
<PAGE>

    It is possible that our currently installed computer systems, software
products or other business systems, or those of our suppliers or service
providers, working either alone or in conjunction with other software or
systems, will not accept input of, store, manipulate and output dates for the
year 2000 or subsequent years without error or interruption. We attempted to
review and resolve those aspects of the year 2000 problem that are within our
direct control and adjust to or influence those aspects that are not within our
direct control. We have completed our assessment of our systems and expect
remediation and testing to be fully implemented by the end of 1999. Our
potential drug candidates do not have any year 2000 exposure. Our major vendors
and suppliers have been contacted with regard to their year 2000 compliance, and
we will continue to monitor their compliance.



    Some risks associated with the year 2000 problem are beyond our ability to
control, including the extent to which our suppliers and service providers
address the year 2000 problem. The failure by a third party to adequately
address the year 2000 issue could have an adverse effect on their operations,
which could have an adverse effect on us. We are assessing the possible effects
on our operations of the possible failure of our key suppliers and providers,
contractors and collaborators to identify and remedy potential year 2000
problems.


                                       14
<PAGE>
                INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

    This prospectus contains forward-looking statements. The forward-looking
statements are principally contained in the sections on "Prospectus Summary,"
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." These statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward-looking statements.
Forward-looking statements include, but are not limited to:


    - the progress of our product development programs, including The R.W.
      Johnson Pharmaceutical Research Institute and Ortho-McNeil's progress with
      respect to our influenza neuraminidase inhibitors;


    - developments with respect to clinical development of drug candidates,
      clinical trials and the regulatory approval process;

    - our estimates regarding our capital requirements and our needs for
      additional financing;

    - developments relating to our selection and in-licensing of targets; and

    - our ability to attract development partners with acceptable development,
      regulatory and commercialization expertise.

    In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "potential" and similar
expressions intended to identify forward-looking statements. These statements
reflect our current views with respect to future events and are based on
assumptions and subject to risks and uncertainties. Given these uncertainties,
you should not place undue reliance on these forward-looking statements. We
discuss many of these risks in greater detail under the heading "Risk Factors."
Also, these forward-looking statements represent our estimates and assumptions
only as of the date of this prospectus.

    You should read this prospectus and the documents that we incorporate by
reference in this prospectus completely and with the understanding that our
actual future results may be materially different from what we expect. We may
not update these forward-looking statements, even though our situation may
change in the future. We qualify all of our forward-looking statements by these
cautionary statements.

                                       15
<PAGE>
                                USE OF PROCEEDS


    We estimate that the net proceeds we will receive from the sale of 2,000,000
shares of common stock will be approximately $45.5 million, or approximately
$52.4 million if the underwriters fully exercise their over-allotment option,
after deducting the estimated underwriting discounts and offering expenses and
assuming an offering price of $24.50 per share. We expect to use the net
proceeds of this offering as follows:


    - to fund drug discovery and other research programs;


    - to fund preclinical studies and clinical trials of our drug candidates;


    - to provide working capital; and

    - for general corporate purposes.

    We have not determined the amount of net proceeds to be used for each of the
specific purposes listed. Accordingly, we will have broad discretion to use the
proceeds as we see fit.


    Based upon the current status of our product development programs, we
believe that the net proceeds from this offering, together with interest on
those net proceeds, and our existing capital resources will satisfy our capital
requirements through 2001.


    Pending such uses, we intend to invest the net proceeds in interest-bearing,
investment-grade instruments, certificates of deposit or direct or guaranteed
obligations of the United States or its agencies.

                          MARKET PRICE OF COMMON STOCK


    Our common stock began trading publicly on the Nasdaq National Market under
the symbol "BCRX." We completed the initial public offering of our common stock
on March 4, 1994. The following table shows the range of high and low sale
prices per share of our common stock as reported by the Nasdaq National Market
for the periods indicated.



<TABLE>
<CAPTION>
                                                                                             COMMON STOCK PRICE
                                                                                            --------------------
                                                                                              HIGH        LOW
                                                                                            ---------  ---------
<S>                                                                                         <C>        <C>
Year ended December 31, 1997
    First Quarter.........................................................................  $   17.00  $   11.50
    Second Quarter........................................................................      14.75      10.06
    Third Quarter.........................................................................      13.75       4.25
    Fourth Quarter........................................................................       8.38       6.25
Year ended December 31, 1998
    First Quarter.........................................................................       9.50       6.88
    Second Quarter........................................................................       9.13       6.00
    Third Quarter.........................................................................       8.00       6.00
    Fourth Quarter........................................................................       8.44       4.38
Year ended December 31, 1999
    First Quarter.........................................................................      11.00       6.38
    Second Quarter........................................................................       9.50       6.38
    Third Quarter.........................................................................      35.31       8.38
    Fourth Quarter (through October 8, 1999)..............................................      25.00      23.38
</TABLE>



    On October 8, 1999, the last sale price of our common stock reported by the
Nasdaq National Market was $24.50 per share. As of August 1, 1999, there were
483 holders of record of our common stock.


                                DIVIDEND POLICY

    We have not declared or paid cash dividends on our common stock in the past
and do not intend to pay dividends on our common stock in the foreseeable
future.

                                       16
<PAGE>
                                 CAPITALIZATION


    The following table shows our capitalization as of June 30, 1999 on an
actual basis and as adjusted to reflect the sale of 2,000,000 shares of common
stock in this offering, assuming an offering price of $24.50 per share and after
deducting the estimated underwriting discounts and offering expenses. This table
should be read in conjunction with the financial statements and related notes
incorporated in this prospectus by reference and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing elsewhere
in this prospectus.


<TABLE>
<CAPTION>
                                                                                                JUNE 30, 1999
                                                                                           -----------------------
<S>                                                                                        <C>         <C>
                                                                                             ACTUAL    AS ADJUSTED
                                                                                           ----------  -----------

<CAPTION>
                                                                                            (IN THOUSANDS, EXCEPT
                                                                                                 SHARE DATA)
<S>                                                                                        <C>         <C>
Capital lease obligations, less current portion..........................................  $       15   $      15
                                                                                           ----------  -----------
Stockholders' equity:
  Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued and
    outstanding..........................................................................          --          --
  Common stock, $0.01 par value; 45,000,000 shares authorized; 14,987,634 issued and
    outstanding, and 16,987,634 shares issued and outstanding as adjusted for this
    offering.............................................................................         150         170
  Additional paid-in capital.............................................................      80,870     126,360
  Accumulated deficit....................................................................     (55,821)    (55,821)
                                                                                           ----------  -----------
    Total stockholders' equity...........................................................      25,199      70,709
                                                                                           ----------  -----------
      Total capitalization...............................................................  $   25,214   $  70,724
                                                                                           ----------  -----------
                                                                                           ----------  -----------
</TABLE>


    The above data excludes 2,507,501 shares of common stock issuable upon
exercise of options outstanding as of June 30, 1999 at a weighted average
exercise price of $7.37 per share.

                                       17
<PAGE>
                                    DILUTION


    Our net tangible book value as of June 30, 1999 was approximately $25.0
million, or $1.67 per share. Net tangible book value per share represents the
amount of our total tangible assets less total liabilities divided by the total
number of shares of common stock outstanding. After giving effect to the sale by
us of 2,000,000 shares of common stock offered by this prospectus at an assumed
offering price of $24.50 per share and after deducting estimated underwriting
discounts and offering expenses, our net tangible book value at June 30, 1999
would have been approximately $70.5 million, or $4.15 per share. This represents
an immediate increase in net tangible book value of $2.48 per share to existing
stockholders and an immediate dilution of $20.35 per share to new investors in
this offering, as illustrated by the following table:



<TABLE>
<S>                                                                        <C>        <C>
    Assumed public offering price per share..............................             $   24.50
        Net tangible book value per share before the offering............  $    1.67
        Increase per share attributable to new investors.................       2.48
                                                                           ---------
    Net tangible book value per share after the offering.................                  4.15
                                                                                      ---------
    Net tangible book value dilution per share to new investors..........             $   20.35
                                                                                      ---------
                                                                                      ---------
</TABLE>


                                       18
<PAGE>
                            SELECTED FINANCIAL DATA


    The following selected financial data should be read in conjunction with the
financial statements and related notes, incorporated by reference in this
prospectus, and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing elsewhere in this prospectus. The selected
historical financial data below as of and for each of the five years ended
December 31, 1998 have been derived from our audited financial statements. Our
selected historical financial data as of June 30, 1999 and for each of the six
months ended June 30, 1998 and 1999 were derived from our unaudited condensed
financial statements. We believe that the unaudited financial data fairly
reflects our results of operations and financial condition for the respective
periods.


<TABLE>
<CAPTION>
                                                                                                    SIX MONTHS ENDED
                                                      YEARS ENDED DECEMBER 31,                          JUNE 30,
                                     ----------------------------------------------------------  ----------------------
                                        1994        1995        1996        1997        1998        1998        1999
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Collaborative and other research
    and development................  $      269  $      223  $    1,558  $    1,000  $    6,371  $       --  $    2,408
  Interest and other...............         465         662       1,094       1,692       1,255         671         633
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
    Total revenues.................         734         885       2,652       2,692       7,626         671       3,041
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
Expenses:
  Research and development.........       5,552       7,107       7,586      10,577       9,291       5,353       4,006
  General and administrative.......       1,904       2,210       2,664       2,682       3,105       1,295       1,683
  Interest.........................         216         144         100          52          15          10           3
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
    Total expenses.................       7,672       9,461      10,350      13,311      12,411       6,658       5,692
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
Net loss...........................  $   (6,938) $   (8,576) $   (7,698) $  (10,619) $   (4,785) $   (5,987) $   (2,651)
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
Net loss per share.................  $    (1.02) $    (0.96) $    (0.69) $    (0.77) $    (0.34) $    (0.43) $    (0.18)
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
Weighted average shares
  outstanding......................       6,787       8,905      11,171      13,780      14,120      13,926      14,981
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                     ----------  ----------  ----------  ----------  ----------  ----------  ----------
</TABLE>

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                       -----------------------------------------------------  JUNE 30,
                                                         1994       1995       1996       1997       1998       1999
                                                       ---------  ---------  ---------  ---------  ---------  ---------
                                                                                (IN THOUSANDS)
<S>                                                    <C>        <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
Cash, cash equivalents and securities
  held-to-maturity...................................  $  10,873  $  11,414  $  35,785  $  24,643  $  27,012  $  24,317
Total assets.........................................     12,803     13,056     37,149     26,485     29,100     26,546
Accumulated deficit..................................    (21,491)   (30,067)   (37,766)   (48,384)   (53,170)   (55,821)
Total stockholders' equity...........................     11,176     11,326     35,403     25,285     27,682     25,199
</TABLE>

                                       19
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


    YOU SHOULD READ THE FOLLOWING DISCUSSION AND ANALYSIS IN CONJUNCTION WITH
OUR FINANCIAL STATEMENTS AND RELATED NOTES INCORPORATED IN THIS PROSPECTUS BY
REFERENCE.


OVERVIEW

    Since our inception in 1986, we have been engaged in research and
development activities and organizational efforts, including:


    - identification and licensing of enzyme targets;


    - drug discovery;

    - structure-based design of drug candidates;

    - small-scale synthesis of compounds;

    - conducting preclinical studies and clinical trials;

    - recruiting our scientific and management personnel;


    - establishing laboratory facilities; and


    - raising capital.


    Our revenues have generally been limited to license fees, milestone
payments, interest income, collaboration research, development and option fees.
Research and development revenue on cost-
reimbursing agreements is recognized as expenses are incurred up to contractual
limits. Research and development revenues, license fees, milestone payments and
option fees are recognized as revenue when irrevocably due. Payments received
that are related to future performance are deferred and taken into income as
earned over a specified future performance period. We have not received any
revenue from the sale of pharmaceutical products. It will be several years, if
ever, before we will recognize significant revenues from royalties received
pursuant to our license agreements, and we do not expect to ever generate
revenues directly from product sales. Future revenues, if any, are likely to
fluctuate substantially from quarter to quarter.


    We have incurred operating losses since our inception. Our accumulated
deficit at June 30, 1999 was $55.8 million. We will require substantial
expenditures relating to the development of our current and future drug
candidates. During the three years ended December 31, 1998, we spent 44.7% of
our research and development expenses on contract research and development,
including:


    - payments to consultants;


    - funding of research at academic institutions;

    - large scale synthesis of compounds;

    - preclinical studies;

    - engaging investigators to conduct clinical trials;


    - hiring contract research organizations to monitor and gather data on
      clinical trials; and


    - using statisticians to evaluate the results of clinical trials.

    The above expenditures for contract research and development for our current
and future drug candidates will vary from quarter to quarter depending on the
status of our research and development projects. Changes in our existing and
future research and development and collaborative relationships will also impact
the status of our research and development projects. While we may, in some
cases, be able to control the timing of development expenses, in part by
accelerating or decelerating certain of these costs, many of these costs will be
incurred irrespective of whether or not we are able to discover drug candidates
or obtain collaborative partners for commercialization. As a result, we believe
that quarter-to-quarter comparisons of our financial results are not necessarily
meaningful and should not be relied upon as an indication of future performance.
If we fail to meet the clinical and financial expectations of securities
analysts and investors, it could have a material adverse effect on the price of
our common stock.

                                       20
<PAGE>
RESULTS OF OPERATIONS

  SIX MONTHS ENDED JUNE 30, 1999 AND 1998


    Collaborative and other research and development revenue increased to $2.4
million in the first six months of 1999. This increase is attributable to the
$2.0 million milestone payment received from Ortho-McNeil in June 1999 and
approximately $0.4 million of research and development work performed for The
R.W. Johnson Pharmaceutical Research Institute. There was no such revenue in the
first six months of 1998. Interest and other income declined 5.7% to $633,000 in
the first six months of 1999 from $671,000 in the first six months of 1998. The
decline in interest and other income is primarily due to a decline in interest
rates.



    Research and development expenses decreased 25.2% to $4.0 million in the
first six months of 1999 from $5.4 million in the first six months of 1998. The
decrease is primarily attributable to a decrease in costs associated with
conducting clinical trials and a reduction in contracted research costs at The
University of Alabama at Birmingham. These costs tend to fluctuate from period
to period depending upon the status of our research projects and collaborative
efforts.



    General and administrative expenses increased 30.0% to $1.7 million in the
first six months of 1999 from $1.3 million in the first six months of 1998. The
increase is primarily the result of a royalty payment to The University of
Alabama at Birmingham in connection with the milestone payment received from
Ortho-McNeil, and increased legal expenses.


    Interest expense decreased to $2,776 in the first six months of 1999 from
$9,914 in the first six months of 1998. The decrease was primarily due to a
decline in capitalized lease obligations resulting in lesser interest expense.
We obtained most of our leases in connection with the move to our facilities in
April 1992.

  YEARS ENDED DECEMBER 31, 1998 AND 1997


    Collaborative and other research and development revenue increased to $6.4
million in 1998 from $1.0 million in 1997, primarily due to the $6.0 million in
up-front fees received from Ortho-McNeil in 1998 for a license agreement for our
influenza neuraminidase inhibitors compared to the $1.0 million milestone
payment received from Torii in 1997. Interest and other income decreased 25.9%
to $1.3 million in 1998 from $1.7 million in 1997, primarily due to a decline in
the weighted average investment for 1998.



    Research and development expenses decreased 12.2% to $9.3 million in 1998
from $10.6 million in 1997. Such expenses vary from period to period based on
the status of our projects. We completed two Phase III clinical trials in 1997.
In 1998, we commenced two Phase I clinical trials for our complement inhibitor,
continued our two Phase I/II clinical trials for an oral formulation of our
purine nucleoside phosphorylase, or PNP, inhibitor and initiated preclinical
studies for our influenza neuraminidase and complement inhibitors. Overall, the
decline in costs associated with our PNP inhibitor project were partially offset
by the increases in our complement inhibitor and influenza neuraminidase
projects. As a result, there was a slight decrease in 1998 in the outside
research and development efforts associated with our three primary research and
development projects. We reduced some of our other discretionary costs, which
were offset by one-time costs associated with signing an exclusive worldwide
license agreement for our proprietary influenza neuraminidase inhibitors and
certain related agreements in September 1998.


    General and administrative expenses increased 15.8% to $3.1 million in 1998
from $2.7 million in 1997. The increase was primarily due to the fees and
expenses incurred in connection with the license agreement and related
agreements for our influenza neuraminidase inhibitors signed in September 1998.

    Interest expense decreased 71.1% to $14,986 in 1998 from $51,880 in 1997.
The decrease was primarily due to a decline in capitalized lease obligations
resulting in lesser interest expense. We obtained most of our leases in
connection with the move to our facilities in April 1992.

                                       21
<PAGE>
  YEARS ENDED DECEMBER 31, 1997 AND 1996


    Collaborative and other research and development revenue decreased 35.8% to
$1.0 million in 1997 from $1.6 million in 1996, primarily due to a $1.0 million
milestone payment received from Torii in 1997 compared to the $1.5 million
license fee received from Torii and a federal grant in 1996. Interest and other
income increased 54.8% to $1.7 million in 1997 from $1.1 million in 1996,
primarily due to interest earned on funds invested from our public offering in
September 1996.


    Research and development expenses increased 39.4% to $10.6 million in 1997
from $7.6 million in 1996. The increase was primarily attributable to costs
associated with manufacturing compounds, clinical trials and preclinical studies
and expenses associated with increased personnel. These costs tend to fluctuate
from period to period depending upon the stage of development and the conduct of
clinical trials.

    General and administrative expenses increased 0.7% to $2.7 million in 1997
from $2.7 million in 1996. The increase was primarily attributable to 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 we successfully
contested in 1996, and was partially offset by decreased fees and taxes on the
Torii milestone in 1997 as compared to the fees and taxes on the Torii license
in 1996 and decreased legal expenses in 1997.

    Interest expense decreased 48.1% to $51,880 in 1997 from $100,031 in 1996.
The decrease was primarily due to a decline in capitalized lease obligations and
the current portion of long-term debt, resulting in lesser interest expense. We
obtained most of our leases in connection with the move to our facilities in
April 1992.

LIQUIDITY AND CAPITAL RESOURCES

    Cash expenditures have exceeded revenues since our inception. Our operations
have principally been funded through public offerings and private placements of
equity and debt securities, equipment lease financing, facility leases,
collaborative and other research and development agreements, licenses and
options for licenses, research grants and interest income. In addition, we have
attempted to contain costs and reduce cash flow requirements by renting
scientific equipment and facilities, contracting with third parties to conduct
certain research and development and using consultants. We expect to incur
additional expenses, resulting in significant losses, as we continue and expand
our research and development activities and undertake additional preclinical
studies and clinical trials of compounds which have been or may be discovered.
We also expect to incur substantial expenses related to the filing, prosecution,
maintenance, defense and enforcement of patent and other intellectual property
claims.

    At December 31, 1998, our cash, cash equivalents and securities
held-to-maturity were $27.0 million, an increase of $2.4 million from December
31, 1997, principally due to the $6.0 million equity investment in us in
connection with the influenza neuraminidase license which offset the cash used
in operations. At June 30, 1999, our cash, cash equivalents and securities
held-to-maturity were $24.3 million, a decrease of approximately $2.7 million
from December 31, 1998, principally due to the cash used by operations for the
six months ended June 30, 1999.

    We have financed some of our equipment purchases with lease lines of credit.
We currently have a $500,000 line of credit with our bank to finance capital
equipment. In January 1992, we entered into an operating lease for our current
facilities which expires on June 30, 2003. We have an option to renew the lease
for an additional three years at current market rates. The operating lease
requires us to pay monthly rent ranging from $21,405 and escalating annually to
a minimum of $24,814 per month in the final year, and a pro rata share of
operating expenses and real estate taxes in excess of base year amounts.

    At December 31, 1998, we had long-term capital lease and operating lease
obligations which provide for aggregate minimum payments of $280,254 in 1999,
$288,128 in 2000 and $285,816 in 2001.

                                       22
<PAGE>
In 1999, we increased the amount of office space we lease by approximately 1,700
square feet. This additional space should increase our annual lease obligations
by less than $15,000 annually.


    Under the terms of our license agreement with The R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil for the development and
commercialization of our influenza neuraminidase inhibitors, we received an
initial $6.0 million payment from Ortho-McNeil and an additional $6.0 million
common stock equity investment from Johnson & Johnson Development Corporation.
In June 1999, we received a $2.0 million milestone payment from Ortho-McNeil in
connection with the initiation of Phase II clinical testing in the United
States. In addition, we may receive cash payments upon specified developmental
and regulatory milestones and royalties on product sales, if any. We cannot
assure you that The R.W. Johnson Pharmaceutical Research Institute or
Ortho-McNeil will continue to develop the product or, if they do so, that such
development will result in receiving milestone payments, obtaining regulatory
approval or achieving future sales of licensed products.



    We previously entered into an exclusive license agreement with Torii under
which Torii paid us $1.5 million in initial license fees and made a $1.5 million
equity investment in us in 1996. The first milestone payment of $1.0 million was
received in 1997. This exclusive license agreement was terminated by Torii in
July 1999.


    We plan to finance our needs principally from the following:


    - our existing capital resources and interest earned on that capital;


    - payments under collaborative and licensing agreements with corporate
      partners; and


    - through lease or loan financing and future public or private financings.



    We believe that our available funds, including the net proceeds from this
offering, will be sufficient to fund our operations at least through 2001.
However, this is a forward-looking statement, and there may be changes that
would consume available resources significantly before such time. Our long-term
capital requirements and the adequacy of our available funds will depend upon
many factors, including:


    - the progress of our research, drug discovery and development programs;

    - changes in existing collaborative relationships;

    - our ability to establish additional collaborative relationships;

    - the magnitude of our research and development programs;

    - the scope and results of preclinical studies and clinical trials to
      identify drug candidates;

    - competitive and technological advances;

    - the time and costs involved in obtaining regulatory approvals;

    - the costs involved in preparing, filing, prosecuting, maintaining and
      enforcing patent claims;


    - our dependence on others, including The R.W. Johnson Pharmaceutical
      Research Institute and Ortho-McNeil, for development and commercialization
      of our product candidates, in particular, our neuraminidase inhibitors;
      and



    - successful commercialization of our products consistent with our licensing
      strategy.


    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 us. 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, could have the effect of diluting or adversely affecting the
holdings or rights of our existing stockholders. In addition, collaborative
arrangements may require us to transfer certain material rights to such
corporate partners. Insufficient funds may require us to delay, scale-back or
eliminate certain of our research and development programs.

                                       23
<PAGE>
RISKS ASSOCIATED WITH THE YEAR 2000


    The year 2000 issue is the result of computer programs being written using
two digits rather than four digits to represent the year. Thus, computer
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in system failures or miscalculations causing
disruptions of operations, including a temporary inability to process certain
data or engage in similar normal business activities.



    PLAN AND STATUS.  Our plan to resolve the year 2000 issue involves four
phases: assessment, remediation, testing and implementation. We have completed
an assessment of our systems. In 1997, we installed a computer network, upgraded
our desktop computers and upgraded our information technology software to a
common standard. Most of our information technology systems are identified by
the manufacturer as year 2000 compliant because of this upgrade. Major vendors
and suppliers have been contacted with regard to their year 2000 compliance and
we will continue to monitor their compliance. Systems identified as not being
year 2000 compliant will be brought into compliance by upgrading either the
software or hardware. We have begun remediation and testing and expect our plan
to be fully implemented by the end of 1999.



    While we have queried our significant suppliers, vendors and other outside
parties and will continue to monitor their year 2000 compliance status, we have
no means of ensuring that suppliers, vendors and other outside parties will be
year 2000 ready. The inability of suppliers, vendors and other outside parties,
including the government, to complete their year 2000 compliance process in a
timely fashion could materially impact us. We cannot determine the effect on us
of non-compliance by suppliers, vendors and outside parties.


    COSTS.  Our costs incurred to date for year 2000 compliance have not been
material and are not expected to be material when completed. We anticipate that
we will be able to fund our costs from current funds available for operations.
If, however, the costs are higher than anticipated, this could have a material
adverse effect on our business, results of operations and financial condition.


    RISKS.  While we believe we have an effective program in place to resolve
the year 2000 issue in a timely manner, as noted above, we have not completed
all necessary phases of the year 2000 program for compliance. In the event that
we, or third parties we depend upon, are not fully compliant by the year's end,
we may not be able to complete the testing of our compounds and advance our
projects into clinical trials as required to support the filings with the FDA
which are necessary to our business. In addition, disruptions in the economy
generally resulting from year 2000 issues could also materially adversely effect
us. We are unable to estimate any potential liability or potential lost revenue
at this time. We may not discover year 2000 compliance issues that will have a
material adverse effect on our business, results of operations and financial
condition.



    CONTINGENCY.  We have contingency plans for certain critical applications
and are working on such plans for others. These contingency plans involve, among
other actions, performing the work manually, increasing inventories and
adjusting staffing strategies. These contingency plans may not be adequate.


                                       24
<PAGE>

                                    BUSINESS



OVERVIEW



    BioCryst Pharmaceuticals, Inc. is a biotechnology company focused on the
development of pharmaceuticals for the treatment of infectious, T-cell related
and cardiovascular diseases and disorders. Our most advanced drug candidate,
BCX-1812, is designed to treat and prevent viral influenza. We licensed this
drug candidate to The R.W. Johnson Pharmaceutical Research Institute, or PRI,
and Ortho-McNeil Pharmaceutical, Inc., both Johnson & Johnson companies. They
have informed us that the planning of Phase III trials for the 1999/2000 flu
season is underway.


OUR BUSINESS STRATEGY


    Our business strategy is to use structure-based drug design technologies to
develop innovative, small-molecule pharmaceuticals to treat a variety of
diseases and disorders. Our drug development efforts are primarily focused on
the development of potent, selective inhibitors of enzyme targets associated
with several diseases. Inhibition of these enzymes might be effective in the
treatment of infectious, T-cell related and cardiovascular diseases and
disorders. The principal elements of our strategy are:



    - SELECT AND LICENSE PROMISING ENZYME TARGETS FOR THE DEVELOPMENT OF
      SMALL-MOLECULE PHARMACEUTICALS. We use our technical expertise and network
      of academic and industry contacts to evaluate and select promising enzyme
      targets to license for drug development. We choose enzyme targets that
      meet as many of the following criteria as possible:



           -   serve important functions in disease pathways;


           -   have well-defined active sites;


           -   have relevant preclinical test models; and



           -   have the potential for short duration clinical trials.



    - FOCUS ON HIGH VALUE-ADDED, STRUCTURE-BASED DRUG DESIGN TECHNOLOGIES. We
      focus our drug-discovery activities and expenditures on applications of
      structure-based drug design technologies to design, develop and optimize
      drug candidates. We believe that structure-based drug design is a powerful
      tool for rapid and efficient development of small-molecule drug candidates
      that have the potential to be safe, effective and relatively inexpensive
      to manufacture. Our structure-based drug design technologies typically
      allow us to design and synthesize multiple drug candidates that inhibit
      the same enzyme target. We believe this strategy can lead to broad patent
      protection and enhance the competitive advantages of our compounds.



    - DEVELOP INHIBITORS THAT ARE PROMISING CANDIDATES FOR COMMERCIALIZATION. We
      test multiple compounds to identify those that are most promising for
      clinical development. Our selection of promising development candidates is
      based on product characteristics, including bioavailability, IN VITRO and
      IN VIVO activity and safety. We believe that this focused strategy allows
      us to eliminate unpromising candidates from consideration sooner without
      incurring substantial clinical costs. In addition, drug candidates are
      selected on the basis of their potential for relatively efficient Phase I
      and Phase II clinical trials that require fewer patients to initially
      indicate safety and efficacy. We will consider, however, more complex
      candidates with longer development cycles if we believe that they offer
      promising commercial opportunities.


    An important element of our business strategy is to control fixed costs and
overhead through outsourcing and partnering. With only 56 employees, we maintain
a streamlined corporate infrastructure that focuses exclusively on our core
areas of expertise. By outsourcing the non-core aspects of our

                                       25
<PAGE>

business, we believe that we can control costs, enable our drug candidates to
reach the market more quickly and reduce our business risk. Key elements of our
outsourcing and partnering strategy include:



    - ENTERING INTO RELATIONSHIPS WITH ACADEMIC INSTITUTIONS AND BIOTECHNOLOGY
      COMPANIES. Many academic institutions and biotechnology companies perform
      extensive research on the molecular and structural biology of potential
      drug development targets. By entering into relationships with these
      institutions, we believe we can significantly reduce the time, cost and
      risks involved in drug target development. Our collaborative relationships
      with such organizations may lead to the licensing of one or more drug
      targets. Upon licensing a drug target from these institutions, the
      scientists from these institutions typically become working partners as
      members of our structure-based drug design teams. We believe this makes us
      a more attractive development partner to these scientists. In addition, we
      collaborate with outside experts in a number of areas, including
      crystallography, molecular modeling, combinatorial chemistry, biology,
      pharmacology, oncology, immunology and infectious diseases. These
      collaborations enable us to complement our internal capabilities without
      adding costly overhead. We believe this strategy allows us to save
      valuable time and expense, complement our technology platform, and further
      diversify and strengthen our portfolio of drug candidates. An example of
      such a collaborative relationship is the arrangement that we have with The
      University of Alabama at Birmingham, or UAB, which has resulted in the
      initiation of most of our early drug development programs.



    - PARTNERING DEVELOPMENT CANDIDATES. We plan to advance drug candidates
      through preclinical development and early-stage clinical trials, then
      license to pharmaceutical or biotechnology partners for final development
      and global marketing. We believe collaborative partnerships are a good
      source of development payments, license fees, milestone payments and
      royalties. They also reduce the costs and risks of late-stage product
      development, regulatory approval, manufacturing and marketing. We believe
      that focusing on discovery and early-stage development while benefitting
      from pharmaceutical partners' proven development and commercialization
      expertise will reduce our internal expenses and allow us to have a larger
      number of drug candidates progress to advanced-stage clinical trials.


PRODUCTS UNDER DEVELOPMENT


    The following table summarizes our development projects as of October 8,
1999:



<TABLE>
<CAPTION>
<S>                                        <C>          <C>                      <C>
                PROGRAM AND                 DELIVERY          DEVELOPMENT         WORLDWIDE
               INDICATION                     FORM               STAGE             RIGHTS
 NEURAMINIDASE INHIBITOR (BCX-1812)

    Influenza                                 Oral       A Phase II--Completed         PRI/
                                                                                     Ortho-
                                                                                  McNeil(1)
 PNP INHIBITOR (BCX-34)

    Cutaneous T-Cell Lymphoma                 Oral       Phase I/II--Underway      BioCryst

    Other T-Cell Cancers                   Intravenous    Phase I/II--Planned      BioCryst
 COMPLEMENT INHIBITORS

    Cardiopulmonary Bypass Surgery         Intravenous   Preclinical--Ongoing      BioCryst
</TABLE>


(1) Our neuraminidase inhibitor, BCX-1812, has been licensed to PRI and
    Ortho-McNeil, both Johnson & Johnson companies.

                                       26
<PAGE>
  NEURAMINIDASE INHIBITOR (BCX-1812)

    INFLUENZA BACKGROUND


    OVERVIEW. Influenza, commonly known as the flu, is perceived by many people
as a transient, inconvenient viral infection that leaves its sufferers
bed-ridden for a few days. In truth, however, it is a virulent, acute
respiratory disease that is sometimes deadly. In North America, Western Europe
and Japan, an estimated 70 million to 150 million individuals suffer from
influenza annually. The flu is particularly dangerous to the elderly, young
children and debilitated patients, accounting for approximately 20,000 deaths in
the United States each year. The flu and associated complications are the sixth
leading cause of death in the United States. The annual cost to the U.S. economy
associated with influenza epidemics was estimated to be in excess of $12
billion, according to a 1994 article in THE NEW ENGLAND JOURNAL OF MEDICINE.



    Flu epidemics are regional outbreaks that cause an average of 40,000
flu-related deaths. Flu pandemics, however, are much more severe. Pandemics are
worldwide outbreaks of a particular strain of the virus that occur relatively
infrequently but can be disastrous. The Spanish flu pandemic of 1918-19 killed
more than 20 million people worldwide. In the United States alone, the Asian flu
of 1957-58 resulted in 70,000 deaths, and the Hong Kong flu of 1968-69 caused
34,000 deaths. The worldwide deaths caused by the Asian and Hong Kong pandemics
topped 1.5 million, with an estimated impact to the world economy of $32
billion. Due to increases in the world population and international air travel,
mutation of the flu virus could spread rapidly, resulting in widespread
morbidity and mortality.


    SYMPTOMS AND TREATMENT OF INFLUENZA. Although influenza is considered a
respiratory disease, flu sufferers usually become acutely ill with high fever,
chills, headache, weakness, loss of appetite and aching joints. The flu sufferer
may also have a sore throat, dry cough and burning eyes.

    For most healthy children and adults, influenza is typically a moderately
severe illness. However, for people with pre-existing medical conditions,
influenza can be very severe and, in many cases, fatal. In these patients,
bacterial infections may occur because the body's immune system is so weakened
by influenza that its defenses against bacteria are low. Bacterial pneumonia is
the most common complication of influenza.


    The development of effective therapeutics has challenged medical researchers
due to the seasonal variation in viral strains and the highly infectious nature
of influenza. Patients, therefore, have limited treatment options. Amantadine
and rimantadine, which are both ion channel blockers, are used for treatment of
influenza A but are ineffective against influenza B and cause some adverse side
effects. In addition, the virus may develop resistance to these drugs.



    Vaccines are available against the disease but have limitations: people
require advance vaccination; vaccines are limited by their specificity to
particular strains of the virus; and vaccines offer little protection if the
vaccine is inaccurate. In addition, many people decline the required injections
because of fear and/or discomfort. The ability of the virus to change its
antigenic structure is a serious obstacle to developing an effective vaccine
against influenza. Different strains can arise when surface antigens on the
virus (the portion of the virus that causes an immune reaction in humans)
undergo minor genetic mutations each year as the virus replicates. Because of
this mutation ability, the immunity acquired in response to infection by a
particular strain of the virus does not provide adequate protection against
viruses that subsequently arise. The production of a new vaccine each year is
not only complex and expensive, but also an inefficient method of global disease
control.



    INHIBITING INFLUENZA NEURAMINIDASE.  Research during the past two decades
has seen dramatic advances in understanding the molecular structure and function
of the influenza virus. Considerable attention has been focused on the enzyme
neuraminidase, which is located on the surface of the virus. Neuraminidase
assists in the release and spread of the flu virus by breaking the chemical
strands that


                                       27
<PAGE>

hold the new viruses to the cell surface, allowing the replicated virus to
spread and infect other cells. This process progresses until the host's immune
response can produce enough antibodies to bring the infection under control.



    Research suggests that if the neuraminidase enzyme were inhibited, the new
viruses would remain attached to the cell surface, thereby preventing the spread
of the virus and the further infection of other cells. The subsequent quantities
of virus in the bloodstream would not be enough to cause disease but would be
sufficient to induce the body to mount an immune response.



    In addition to our neuraminidase inhibitor, both Hoffmann-La Roche, in
collaboration with Gilead Sciences, and Glaxo Wellcome are developing
neuraminidase inhibitors. Hoffmann-La Roche has developed an orally active
neuraminidase inhibitor and filed a new drug application with the FDA for this
twice-a-day treatment. Similarly, Glaxo Wellcome's neuraminidase inhibitor,
which is administered by dry powder inhaler twice a day, received FDA approval
and has recently been launched in the United States and other countries.


    OUR INFLUENZA NEURAMINIDASE INHIBITOR


    BACKGROUND. In 1987, scientists at The University of Alabama at Birmingham,
or UAB, in collaboration with our scientists, began determining the molecular
structure of the influenza neuraminidase enzyme from several different strains
of influenza, using X-ray crystallography. Subsequently, our scientists and UAB
scientists developed numerous new inhibitors of these enzymes using
structure-based drug design. We licensed the influenza neuraminidase program
from UAB in 1994 and proceeded to complete the crystallographic structural
studies needed to advance the development of neuraminidase inhibitors. The
structure of the active site of influenza neuraminidase is similar among
different viral strains. Because of this similarity, we believe that our
neuraminidase inhibitors may be effective in the treatment and prevention of
influenza, regardless of changes in the virus.


    Four of the patented compounds from our development efforts emerged as
viable product development candidates. We called them BCX-1812, 1827, 1898 and
1923. Preclinical studies demonstrated that our drug candidates have the
following benefits:

    - excellent safety profile;


    - inhibition of both influenza A and B;



    - effective when taken orally;



    - probable once-a-day dosage; and



    - can be made into a liquid form, allowing for use by the elderly and young
      children.



    CLINICAL DEVELOPMENT. In September 1998, we entered into an exclusive
worldwide license agreement with PRI and Ortho-McNeil to develop and market our
proprietary influenza neuraminidase inhibitors to treat and prevent viral
influenza. Since the collaboration was established, PRI selected BCX-1812 for
clinical development and moved through Phase I clinical trials and a Phase II
clinical study by August 1999. We recently announced preliminary results from a
Phase II placebo-controlled, randomized study conducted by PRI for the treatment
of healthy volunteers infected with a strain of influenza A. PRI advised us that
the data from this Phase II study indicated a statistically significant
reduction of flu virus in the body and that the drug was well-tolerated at all
dosage levels. We have been informed by PRI that planning of Phase III clinical
trials for the 1999/2000 influenza season is underway. The FDA may not accept
the Phase III clinical protocols, PRI may not commence the Phase III clinical
trials in 1999 or at all, or the Phase III clinical trials, if initiated, may
not be successful.


                                       28
<PAGE>
  PNP INHIBITOR (BCX-34)


    T-CELL RELATED DISEASES



    OVERVIEW. The human immune system employs specialized cells, including
T-cells, to control infection by recognizing and attacking disease-causing
viruses, bacteria and parasites. T-cells are an essential part of the body's
immune system that serve a dual purpose--orchestrating and participating in the
body's immune response. For the most part, this system works flawlessly to
protect the body. However, there are diseases in which T-cells multiply
uncontrollably (T-cell proliferative diseases) or attack normal cells
(autoimmune diseases). Proliferating T-cells have been implicated in a number of
T-cell cancers, including cutaneous T-cell lymphoma.



    PNP INHIBITION.  Purine nucleoside phosphorylase, or PNP, is an enzyme that
is believed to play an important role in T-cell proliferation, because PNP is
necessary to maintain normal DNA synthesis in T-cells. We believe that
inhibiting PNP is a new mechanism for suppressing T-cell replication without
significantly affecting other cells, and we believe this may prove to have an
impact on the treatment of several diseases.



    OUR PNP INHIBITOR



    BACKGROUND. Our lead PNP inhibitor drug candidate, BCX-34, is designed to
suppress T-cell replication without significantly affecting other cells. BCX-34
has been in clinical trials since 1992. Our initial approach was to develop a
topical cream formulation of BCX-34, which, if effective, could have led to a
rapid, cost-effective regulatory approval. We conducted two Phase III,
double-blinded placebo controlled clinical trials in 1996 and 1997 to determine
the effects of topical BCX-34 on psoriasis and cutaneous T-cell lymphoma. These
trials, however, did not show statistically significant results between the
treated and placebo groups. Therefore, we discontinued the topical program.



    CURRENT DEVELOPMENT STRATEGY.  We believe that, in order for BCX-34 to be
effective, it must be administered in a form and an amount that obtains adequate
levels of the drug in the body. In the clinical trials we have completed with an
oral formulation of BCX-34, the dose levels were inadequate to obtain clinically
relevant results. These clinical trials, however, were effective in establishing
the safety of BCX-34 at various dose levels and the maximum oral dose absorbable
by the body.



    On the basis of these studies, we have designed two new Phase I/II clinical
trials to evaluate BCX-34 in the treatment of various T-cell cancers. Although
the patient population for T-cell cancers is small, we believe that we can more
quickly evaluate the efficacy of BCX-34 because these patients are suffering
from a serious unmet medical need and have a generally unfavorable clinical
outlook.



    One of these clinical trials is being conducted to evaluate BCX-34 for the
treatment of cutaneous T-cell lymphoma at the maximum oral dose. This trial is
expected to be completed in early 2000. The second trial is for treatment of
T-cell cancers, such as T-lymphoblastic leukemias and lymphomas. This trial,
which is expected to start in 2000, is being designed to evaluate higher blood
levels of BCX-34, which can only be obtained with intravenous therapy.



    These two clinical trials should provide us with the necessary information
to begin other studies in T-cell related diseases. Hence, our future clinical
evaluation of BCX-34 will be determined by the outcome of these two studies in
T-cell cancers. If we are unable to demonstrate the clinical efficacy of BCX-34
at these higher dose levels, we will likely discontinue developing BCX-34.


  COMPLEMENT INHIBITORS

    COMPLEMENT CASCADE


    OVERVIEW. The human body is equipped with defense mechanisms that respond
aggressively to infection or injury. This response is uniquely designed for each
challenge whether caused by viruses,


                                       29
<PAGE>

bacteria, or other foreign pathogens or materials. Once the immune system
recognizes a "foreign invader," complement is activated to destroy or remove it.
The complement cascade is a system of functionally linked enzymes that assists
in the removal of bacteria or destruction of cells that the body does not
recognize as its own.



    Complement enzymes circulate in the blood in an inactive form. When the
complement enzymes are activated, they can result in adverse biological effects
including tissue damage. This occurs in an unregulated way in certain medical
situations such as cardiopulmonary bypass surgery.



    OUR COMPLEMENT INHIBITORS



    BACKGROUND. Working closely with scientists of The University of Alabama at
Birmingham, we characterized the three-dimensional structure of one of the
components of the complement cascade. In 1997, using X-ray crystallographic and
molecular modeling techniques, we designed and synthesized a class of small
molecule compounds that are highly potent inhibitors of complement and certain
other blood enzymes. These compounds may have applications in the treatment of
several disorders by limiting the rapid and aggressive damage caused by the
activation of complement proteins. In addition, preclinical studies to examine
the safety and efficacy of several of these compounds are currently in progress.



    CLINICAL DEVELOPMENT. We completed two Phase I studies of one of the drug
candidates in our complement inhibitor program. These studies showed that the
effective dose for blocking complement activation was too close to toxicologic
limits to be used during cardiopulmonary bypass surgery. Hence, other compounds
in this series are now being evaluated for clinical development.


  TISSUE FACTOR/VIIA


    A blood clot is formed by a series of complicated reactions that are
initiated by the Tissue Factor/ VIIa complex. Animal tests show that blood clot
formation can be minimized by inhibiting the Tissue Factor/VIIa complex. Tissue
Factor/VIIa inhibitors may potentially be useful in various cardiovascular
diseases and disorders. We are attempting to identify potential inhibitors of
Tissue Factor/VIIa. We have an agreement with Sunol Molecular Corp. to expedite
the discovery of new drug candidates designed to inhibit Tissue Factor/VIIa for
our cardiovascular program. Under the terms of this agreement, Sunol conducts
research and supplies us with tissue factor for our drug design program.



STRUCTURE-BASED DRUG DESIGN



    Structure-based drug design is a drug discovery approach by which synthetic
compounds are designed from detailed structural knowledge of the active sites of
enzyme targets associated with particular diseases. Enzymes are proteins that
act as catalysts for many vital biological reactions. Our goal generally is to
design a compound that will fit in the active site of an enzyme (the active site
of an enzyme is the area into which a chemical or biological molecule fits to
initiate a biochemical reaction) and thereby interfere with the progression of
disease.



    Our structure-based drug design involves the application of both traditional
biology and medicinal chemistry and an array of advanced technologies. We use
X-ray crystallography, combinatorial chemistry, computer modeling of molecular
structures and protein biophysical chemistry to focus on the three-dimensional
molecular structure and active site characteristics of the enzymes that control
cellular biology.



    We believe that structure-based drug design technologies are superior to
drug screening techniques. By identifying the target enzyme in advance and by
discovering the chemical and molecular structure of the enzyme, we believe it is
possible to design a better drug to interact with the enzyme. In addition, the
structural data obtained by X-ray crystallographic analysis allows iterative
analysis and compound modification at each stage of the biological evaluation.
This capability makes structure-based drug design a powerful tool for rapid and
efficient development of drugs that are highly specific for particular enzyme
target sites.


                                       30
<PAGE>
RESEARCH AND DEVELOPMENT

    We initiated our research and development program in 1986, with drug
synthesis beginning in 1987. We have assembled a scientific research staff with
expertise in a broad base of advanced research technologies including protein
biochemistry, X-ray crystallography, chemistry and pharmacology. Our research
facilities include protein biochemistry and organic synthesis laboratories, IN
VITRO and IN VIVO testing facilities, X-ray crystallography, computer and
graphics equipment and formulation facilities.

    During the years ended December 31, 1996, 1997 and 1998, we spent an
aggregate of $27.5 million on research and development. Approximately $15.2
million of that amount was spent on in-house research and development, and $12.3
million was spent on contract research and development.

COLLABORATIVE RELATIONSHIPS

  CORPORATE ALLIANCES

    3-DIMENSIONAL PHARMACEUTICALS, INC.

    In October 1996, we signed a research collaboration agreement with
3-Dimensional Pharmaceuticals under which we will share resources and technology
to develop inhibitors of complement enzymes. The agreement combines our
capabilities in structure-based drug design with the selection power of
3-Dimensional Pharmaceuticals' Directed Diversity-Registered Trademark-
technology, a proprietary method of directing combinatorial chemistry and high
throughput screening toward specific molecular targets. In June 1999, we updated
and renewed our original agreement to concentrate on selected complement enzymes
as targets for the design of inhibitors. Under the terms of the agreement, the
companies are responsible for their own research costs. If a drug candidate
emerges as a result of the joint research, the companies will negotiate the
product development and commercialization rights and responsibilities.

    THE R.W. JOHNSON PHARMACEUTICAL RESEARCH INSTITUTE AND ORTHO-MCNEIL
     PHARMACEUTICAL, INC.


    We have entered into an exclusive worldwide license agreement with PRI and
Ortho-McNeil to develop and market our proprietary influenza neuraminidase
inhibitors to treat and prevent viral influenza. We received an initial $6.0
million payment from Ortho-McNeil and an additional $6.0 million common stock
equity investment from Johnson & Johnson Development Corporation. In June 1999,
we received a $2.0 million milestone payment from Ortho-McNeil in connection
with the initiation of Phase II clinical testing in the United States. In
addition, we may receive cash payments upon achievement of specified
developmental and regulatory milestones and royalties on product sales, if any.


    PRI will be responsible for research and development of the compounds,
including expenses. Ortho-McNeil will market products approved by the FDA for
marketing in the United States. Other Johnson & Johnson companies, including
Janssen-Cilag, will market products approved for marketing outside the United
States.

    NOVARTIS AG


    In 1990, we entered into an exclusive worldwide license agreement with
Novartis AG, formerly Ciba-Geigy, for use of certain of our PNP inhibitors, not
including BCX-34. We received an initial $500,000 payment from Novartis, up to
$300,000 of which is refundable in circumstances specified in the agreement. The
agreement also provides for Novartis to pay us royalties on sales, if any, of
the PNP inhibitors. We may not receive any revenue based on this license
agreement.


                                       31
<PAGE>
    SUNOL MOLECULAR CORP.

    In April 1999, we entered into an agreement with Sunol. This agreement
requires Sunol to conduct research and supply us with protein targets for drug
design to expedite the discovery of new drug candidates designed to inhibit
Tissue Factor/VIIa for our cardiovascular program.

    The initial focus of the agreement will be on identifying compounds that
work to inhibit the coagulation cascade of Tissue Factor/VIIa. Tissue
Factor/VIIa is a promising target for the development of anticoagulants for
cardiopulmonary bypass surgery, angioplasty and other cardiovascular disorders.
Sunol will produce Tissue Factor and provide us with quantities of the protein
to assist in the identification of inhibitors specific to the activity of Tissue
Factor/VIIa.

    TORII PHARMACEUTICAL CO., LTD.

    In 1996, we granted Torii an exclusive license, with the right to
sublicense, develop, manufacture and commercialize BCX-34 and certain other PNP
inhibitor compounds in Japan for the treatment of rheumatoid arthritis, T-cell
cancers and atopic dermatitis. The exclusive license agreement was terminated by
Torii and the rights to develop, manufacture and commercialize BCX-34 and
certain other PNP inhibitor compounds in Japan reverted to us. Torii paid us an
aggregate of $4.0 million for license fees, milestone payments and an equity
investment.

  ACADEMIC ALLIANCES

    THE UNIVERSITY OF ALABAMA AT BIRMINGHAM


    We have had a close relationship with The University of Alabama at
Birmingham, or UAB, since our formation. Our Chairman and Chief Executive
Officer, Dr. Bugg, was the previous Director of the UAB Center for
Macromolecular Crystallography, and our President and Chief Operating Officer,
Dr. Bennett, was the former President of UAB, the former Chairman of the
Department of Medicine at UAB and a former Chairman of the Department of
Microbiology at UAB. Several of our consultants are employed by UAB. UAB has one
of the largest X-ray crystallography centers in the world with approximately 124
full-time staff members and approximately $20.7 million in research grants and
contract funding in 1998. Three of our early programs, PNP, influenza and
complement inhibitors, originated at UAB. When we were founded in 1986, we
entered into an agreement with UAB which granted us exclusive rights to
discoveries resulting from research relating to PNP. We also entered into an
agreement with UAB that gives us the first option to obtain a non-exclusive
license to patents and copyrights of UAB not developed in collaboration with us
or an exclusive license, in some cases worldwide, to patents, copyrights or
intellectual property arising from research of UAB collaborators or
investigators under contract to us.



    Subsequently, we entered into agreements with UAB for influenza
neuraminidase and complement inhibitors. Under the terms of these agreements,
UAB performed specific research for us in return for research payments and
license fees. UAB has granted us certain rights to any discoveries in these
areas resulting from research developed by UAB or jointly developed with us. We
have agreed to pay certain royalties on sales of any resulting product and to
share in future payments received from other third-party collaborators. UAB has
received and will continue to receive a portion of any license fees, milestone
payments and royalties we receive from PRI and Ortho-McNeil for the influenza
collaboration. We have completed the research under the UAB influenza agreement.
We are continuing to fund the research program under the complement inhibitors
agreement, which entitles us to an assignment of, or a right to an exclusive
license for, any inhibitors of specified complement enzymes developed by UAB
scientists during the period of support or for a one-year period thereafter.
These two agreements have initial 25-year terms, are automatically renewable for
five-year terms throughout the life of the last patent and are terminable by us
upon three-month's notice and by UAB under certain circumstances.


                                       32
<PAGE>
PATENTS AND PROPRIETARY INFORMATION

    Our success will depend in part on our ability to obtain and enforce patent
protection for our products, methods, processes and other proprietary
technologies, preserve our trade secrets, and operate without infringing on the
proprietary rights of third parties, both in the United States and in other
countries. We own or have rights to certain proprietary information, proprietary
technology, issued and allowed patents and patent applications which relate to
compounds we are developing. We actively seek, when appropriate, protection for
our products, proprietary technology and proprietary information by means of
U.S. and foreign patents, trademarks and contractual arrangements. In addition,
we rely upon trade secrets and contractual arrangements to protect certain of
our proprietary information, proprietary technology and products.


    To date, we have been issued seven U.S. patents which expire between 2009
and 2015 and relate to our PNP inhibitor compounds. We have also been issued a
U.S. patent covering a manufacturing process for our PNP inhibitors, which
expires in 2015, and have filed a patent application for new processes to
prepare BCX-34 and other PNP inhibitors. The U.S. Patent and Trademark Office
has also issued to us a U.S. patent relating to inhibitors of influenza
neuraminidase, which expires in 2015. We have also tried to protect our
technology through the following patent applications which are still pending:
two provisional U.S. patent applications and a patent cooperation treaty
application related to our neuraminidase inhibitors; two provisional U.S. patent
applications related to compounds and methods for detecting influenza virus; a
patent cooperation treaty application related to complement inhibitors; and a
provisional application relating to inhibiting T-cell proliferation. Our pending
applications may not result in issued patents, and our patents may not provide
us with sufficient protection against competitive products or otherwise be
commercially available.



    Our success is also dependent upon the skills, knowledge and experience of
our scientific and technical personnel, none of which is patentable. To help
protect our rights, we require all employees, consultants, advisors and
collaborators to enter into confidentiality agreements which prohibit the
disclosure of confidential information to anyone outside of our company and
requires disclosure and assignment to us of their ideas, developments,
discoveries and inventions. These agreements may not provide adequate protection
for our 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.


MARKETING AND SALES


    We lack experience in marketing, distributing and selling pharmaceutical
products. Our strategy is to rely on collaborators, licensees or arrangements
with others to provide for the marketing, distribution and sales of any products
we may develop. We may not be able to establish and maintain acceptable
commercial arrangements with collaborators, licensees or others to perform such
activities.



    If approved, BCX-1812 will likely be the third influenza neuraminidase
inhibitor to the market behind the influenza neuraminidase inhibitors currently
marketed by Glaxo Wellcome and in development by Hoffmann-LaRoche, in
collaboration with Gilead Sciences. We believe this may provide marketing
challenges. However, we believe that there may be some advantages to not being
first to market. We expect that both Glaxo Wellcome and Hoffmann-La Roche will
play a major role in establishing the influenza treatment market and creating a
demand for neuraminidase inhibitors on which Ortho-McNeil will be able to
capitalize if our neuraminidase inhibitor is approved for marketing. Because
neuraminidase inhibitors represent a new class of drugs that could impact a
large number of people, a major education effort will be required to promote
acceptance by both the treating physicians and the target population.


                                       33
<PAGE>
COMPETITION


    The pharmaceutical and biotechnology industries are intensely competitive.
Many companies, including biotechnology, chemical and pharmaceutical companies,
are actively engaged in activities similar to ours, including research and
development of drugs for the treatment of infectious, T-cell related and
cardiovascular diseases and disorders. Many of these companies have
substantially greater financial and other resources, larger research and
development staffs, and more extensive marketing and manufacturing organizations
than we do. In addition, some of them have considerable experience in
preclinical testing, clinical trials and other regulatory approval procedures.
There are also academic institutions, governmental agencies and other research
organizations that are conducting research in areas in which we are working.
They may also market commercial products, either on their own or through
collaborative efforts.



    We expect to encounter significant competition for any of the pharmaceutical
products we plan to develop. Companies that complete clinical trials, obtain
required regulatory approvals and commence commercial sales of their products
before their competitors may achieve a significant competitive advantage. In
addition, certain pharmaceutical and biotechnology firms, including major
pharmaceutical companies and specialized structure-based drug design companies,
have announced efforts in the field of structure-based drug design and in the
fields of PNP and complement inhibitors. In addition, we are aware that other
companies or institutions are pursuing development of new drugs and technologies
directly targeted at applications for which we are developing our drug
compounds. For example, Glaxo Wellcome's influenza neuraminidase inhibitor has
received approval from the FDA, and they recently received approval to market
their inhibitor in the United States and other countries. This product is
administered in the form of a dry-powder inhaler, which could be difficult to
use and may cause patient discomfort. Hoffmann-La Roche, in collaboration with
Gilead Sciences, also has an influenza neuraminidase inhibitor which is under
review by the FDA. If approved, our influenza neuraminidase inhibitor, BCX-1812,
will likely be the third neuraminidase inhibitor to the market. We believe this
may provide marketing challenges. In addition, other therapies for the treatment
or prevention of flu include vaccines and the drugs amantadine and rimantadine,
as well as over-the-counter products. There is also a vaccine currently in
preclinical development that may immunize people against all strains of the flu
virus, rendering flu drug products like ours obsolete.



    In order to compete successfully, we must develop proprietary positions in
patented drugs for therapeutic markets that have not been satisfactorily
addressed by conventional research strategies and, in the process, expand our
expertise in structure-based drug design. Our products, even if successfully
tested and developed, may not be adopted by physicians over other products and
may not offer economically feasible alternatives to other therapies.


GOVERNMENT REGULATION

    The FDA regulates the pharmaceutical and biotechnology industries in the
United States, and our drug candidates are subject to extensive and rigorous
domestic government regulations prior to commercialization. The FDA regulates,
among other things, the development, testing, manufacture, safety, efficacy,
record-keeping, labeling, storage, approval, advertising, promotion, sale and
distribution of pharmaceutical products. In foreign countries, our products are
also subject to extensive regulation by foreign governments. These government
regulations will be a significant factor in the production and marketing of any
pharmaceutical products that we develop. Failure to comply with applicable FDA
and other regulatory requirements at any stage during the regulatory process may
subject us to sanctions, including:

    - delays;

    - warning letters;

                                       34
<PAGE>
    - fines;

    - product recalls or seizures;

    - injunctions;

    - penalties;

    - refusal of the FDA to review pending market approval applications or
      supplements to approval applications;

    - total or partial suspension of production;

    - civil penalties;

    - withdrawals of previously approved marketing applications; and

    - criminal prosecutions.

    The regulatory review and approval process is lengthy, expensive and
uncertain. Before obtaining regulatory approvals for the commercial sale of any
products, our product candidates must be demonstrated to be safe and effective
for use in humans. The approval process takes many years, substantial expenses
may be incurred and significant time may be devoted to clinical development.


    Before testing potential candidates in humans, laboratory and animal studies
are carried out to determine safety and biological activity. After completing
preclinical trials, an investigational new drug application, including a
proposal to begin clinical trials, must be filed with the FDA. We have filed
eight investigational new drug applications to date and plan to file, or rely on
certain collaborative partners to file, additional investigational new drug
applications in the future. Thirty days after filing an investigational new drug
application, a Phase I human clinical trial can start unless the FDA places a
hold on the study.


    Phase I trials to determine safety are conducted in a small group of
patients or healthy volunteers. Tolerances and the metabolic and pharmacologic
actions of our drug candidates at different doses are also assessed. After
completion of the initial trial, a Phase II trial is conducted to assess safety
and efficacy and establish the optimal dose in patients. If Phase II is
successful, a Phase III trial is conducted to verify the results in a larger
patient population. A Phase III trial is required for FDA approval to market a
drug. A Phase III trial may require hundreds or even thousands of patients and
is the most expensive to conduct. The goal in Phase III is to collect enough
safety and efficacy data to obtain FDA approval for treatment of a particular
disease.

    Initiation and completion of the clinical trial phases is dependent on
several factors including things that are beyond our control. For example, the
clinical trials are dependent on patient enrollment, but the rate at which
patients enroll in the study depends on:


    - the size of the patient population we intend to treat;



    - the availability of patients;



    - the willingness of patients to participate; and


    - the patient meeting the eligibility criteria.

Delays in planned patient enrollment may result in increased expense.


    After completion of the clinical trials of a product, a new drug application
is submitted to the FDA for marketing approval before commercialization of the
product. Approval may not be granted on a timely basis, if at all. The FDA, as a
result of the Food and Drug Administration Modernization Act of 1997, has six
months to review and act upon license applications for priority therapeutics
that are for a life-threatening or unmet medical need. Standard reviews can take
between one and two years, and


                                       35
<PAGE>
can even take longer if significant questions arise during the review process.
Any required approvals, once obtained, may be withdrawn.

    In addition to clinical development regulations, we and our contract
manufacturers and collaborators also are required to comply with the applicable
FDA current good manufacturing practice regulations. Good manufacturing practice
regulations include requirements relating to quality control and quality
assurance as well as the corresponding maintenance of records and documentation.
Manufacturing facilities are subject to inspection by the FDA. Such facilities
must be approved before we can use them in commercial manufacturing of our
potential products. We or our contract manufacturers may not be able to comply
with the applicable good manufacturing practice requirements and other FDA
regulatory requirements. If we or our contract manufacturers fail to comply, our
business, financial condition and results of operations will be materially
adversely affected.


    In June 1995, we notified the FDA that we submitted incorrect efficacy data
for our Phase II dose-ranging studies of topical BCX-34 for cutaneous T-cell
lymphoma and psoriasis. The FDA inspected us in November 1995 and issued us a
List of Inspectional Observations, Form FDA 483, that cited our failure to
follow good clinical practices. The FDA also inspected us in June 1996, the
focus was on the two 1995 Phase II dose-ranging studies of topical BCX-34 for
the treatment of cutaneous T-cell lymphoma and psoriasis. As a result of the
investigation, the FDA issued us a Form FDA 483, which cited our failure to
follow good clinical practices. As a consequence, our ongoing and future
clinical studies may receive increased scrutiny, which may delay the regulatory
review process.



    Also in June 1996, the FDA investigated one of the clinical trial sites that
participated in our 1995 Phase II dose-ranging studies of topical BCX-34 for the
treatment of cutaneous T-cell lymphoma and psoriasis. As a result, the FDA
issued a Form FDA 483 to the principal investigator at a clinical site which
cited a number of deficiencies, including:


    - improper delegations of authority by the principal investigator;

    - failures to follow the protocols;


    - deviations from established procedures of the institutional review board;
      and


    - discrepancies or deficiencies in documentation and reporting.


    Following the failure of topical BCX-34 in 1997, we discontinued the
development of the topical formulations of BCX-34. In November 1997, the FDA
notified us that they would not accept work performed by the deficient
investigator without further validation. The majority of the work performed by
this investigator was for a topical formulation of BCX-34, which was
discontinued in 1997. However, work performed by this investigator for oral
BCX-34 will not be accepted by the FDA to support efficacy in any new drug
application.


SCIENTIFIC ADVISORY BOARD AND CONSULTANTS


    We have assembled a scientific advisory board comprised of five scientific
advisors who are leaders in certain of our core disciplines or who otherwise
have specific expertise in our therapeutic focus areas. We also have consulting
agreements with a number of other scientists with expertise in our core
disciplines or who are specialists in diseases or treatments on which we focus.
The scientific advisory board meets as a group at scheduled meetings and the
consultants meet more frequently, on an individual basis, with our scientific
personnel and management to discuss our ongoing research and drug discovery and
development projects.


                                       36
<PAGE>
    The scientific advisory board consists of the following individuals:

<TABLE>
<CAPTION>
                          NAME                                                    POSITION
- --------------------------------------------------------  --------------------------------------------------------
<S>                                                       <C>
Albert F. LoBuglio, M.D. (Chairman).....................  Professor of Medicine and the Director of The University
                                                          of Alabama at Birmingham Comprehensive Cancer Center.

Gordon N. Gill, M.D. ...................................  Professor of Medicine and Chair of the Faculty of Basic
                                                          Biomedical Sciences at the University of California, San
                                                          Diego School of Medicine.

Herbert A. Hauptman, Ph.D. .............................  President of the Hauptman-Woodward Medical Research
                                                          Institute, Inc. (formerly the Medical Foundation
                                                          (Buffalo), Inc.), and Research Professor in Biophysical
                                                          Sciences at the State University of New York (Buffalo),
                                                          recipient of the Nobel Prize in Chemistry (1985).

Yuichi Iwaki, M.D., Ph.D. ..............................  Professor of Urology and Pathology, University of
                                                          Southern California School of Medicine.

Hamilton O. Smith, M.D. ................................  Professor, Molecular Biology and Genetics Department at
                                                          The Johns Hopkins University School of Medicine,
                                                          retired, Director of DNA Resources at Celera Genomics
                                                          Corporation, recipient of the Nobel Prize in Medicine
                                                          (1978).
</TABLE>


    The scientific advisors and the consultants are reimbursed for their
expenses and receive nominal cash compensation in connection with their service
and have been issued options and/or shares of common stock. The scientific
advisors and the consultants are all employed by or have consulting agreements
with entities other than us, some of which may compete with us in the future.
The scientific advisors and the consultants are expected to devote only a small
portion of their time to our business, although no specific time commitment has
been established. They are not expected to participate actively in our affairs
or in the development of our technology. Several of the institutions with which
the scientific advisors and the consultants are affiliated may adopt new
regulations or policies that limit the ability of the scientific advisors and
the consultants to consult with us. The loss of the services of the scientific
advisors and the consultants could adversely affect us to the extent that we are
pursuing research or development in areas relevant to the scientific advisors'
and consultants' expertise. To the extent members of our scientific advisory
board or the consultants have consulting arrangements with or become employed by
any of our competitors, we could be materially adversely affected. One member of
the scientific advisory board, Dr. Gordon N. Gill, is a member of the Board of
Directors of the Agouron Institute. The Agouron Institute is a shareholder in,
and has had contractual relationships with, Agouron Pharmaceuticals, Inc., a
subsidiary of Warner-Lambert, that uses a core technology similar to ours.



    Any inventions or processes independently discovered by the scientific
advisors or the consultants may not become our property and will probably remain
the property of such persons or of such persons' employers. In addition, the
institutions with which the scientific advisors and the consultants are
affiliated may make available the research services of their personnel,
including the scientific advisors and the consultants, to our competitors
pursuant to sponsored research agreements. We require the scientific advisors
and the consultants to enter into confidentiality agreements which prohibit the
disclosure of confidential information to anyone outside of our company and
require disclosure and assignment to us of their ideas, developments,
discoveries or inventions. However, our competitors may gain access to trade
secrets and other proprietary information developed by us and disclosed to the
scientific advisors and the consultants.


                                       37
<PAGE>
HUMAN RESOURCES


    As of October 8, 1999, we had 56 employees, of whom 43 were engaged in
research and development and 13 were in general and administrative functions.
Our scientific staff, 19 of whom hold Ph.D. or M.D. degrees, has diversified
experience in biochemistry, pharmacology, X-ray crystallography, synthetic
organic chemistry, computational chemistry, medicinal chemistry and
pharmacology. We consider our relations with our employees to be satisfactory.


PROPERTIES

    Our administrative offices and principal research facility are located in
42,950 square feet of leased office space in Riverchase Industrial/Research Park
in Birmingham, Alabama. The lease runs through June 30, 2003 with an option to
lease for an additional three years at current market rates. We believe that our
facilities are adequate for our current operations.

LEGAL PROCEEDINGS


    We are not currently a party in any material legal proceedings.


                                       38
<PAGE>
                                   MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS


    The following table shows information about our executive officers and
directors as of October 8, 1999:


<TABLE>
<CAPTION>
                        NAME                               AGE                            POSITION
- -----------------------------------------------------      ---      -----------------------------------------------------
<S>                                                    <C>          <C>
Charles E. Bugg, Ph.D................................          58   Chairman, Chief Executive Officer and Director
J. Claude Bennett, M.D...............................          65   President, Chief Operating Officer, Medical Director
                                                                    and Director
John A. Montgomery, Ph.D. ...........................          75   Senior Vice President, Secretary, Chief Scientific
                                                                    Officer and Director
Ronald E. Gray.......................................          58   Chief Financial Officer, Assistant Secretary and
                                                                    Treasurer
John R. Uhrin........................................          46   Vice President, Corporate Development
William W. Featheringill.............................          56   Director
Edwin A. Gee, Ph.D...................................          79   Director
Zola P. Horovitz, Ph.D...............................          64   Director
Joseph H. Sherrill, Jr...............................          58   Director
William M. Spencer, III..............................          78   Director
Randolph C. Steer, M.D., Ph.D........................          49   Director
</TABLE>

    Messrs. Featheringill and Spencer and Dr. Gee are members of our
Compensation and Audit Committees.


    CHARLES E. BUGG, PH.D. was named Chairman of the Board, Chief Executive
Officer and Director in November 1993 and President in January 1995. Dr. Bugg
relinquished the position of President in December 1996 when Dr. Bennett joined
BioCryst in that position. Prior to joining BioCryst, Dr. Bugg had served as the
Director of the Center for Macromolecular Crystallography, Associate Director of
the Comprehensive Cancer Center and Professor of Biochemistry at The University
of Alabama at Birmingham since 1975. He was a Founder of BioCryst and served as
BioCryst's first Chief Executive Officer from 1987 to 1988 while on a sabbatical
from The University of Alabama at Birmingham. Dr. Bugg also served as Chairman
of our scientific advisory board from January 1986 to November 1993. He
continues to hold the position of Professor Emeritus in Biochemistry and
Molecular Genetics at The University of Alabama at Birmingham, a position he has
held since January 1994.



    J. CLAUDE BENNETT, M.D. was named President and Chief Operating Officer in
December 1996 and elected a Director in January 1997. He was appointed our
Medical Director in August 1999. Prior to joining BioCryst, Dr. Bennett was
President of The University of Alabama at Birmingham from October 1993 to
December 1996, Professor and Chairman of the Department of Medicine of The
University of Alabama at Birmingham from January 1982 to October 1993, and
Professor and Chairman of the Department of Microbiology from January 1970 to
December 1982. Dr. Bennett served on BioCryst's scientific advisory board from
1989 to 1996. He continues to hold the position of Distinguished University
Professor Emeritus at The University of Alabama at Birmingham, a position he has
held since January 1997.


    JOHN A. MONTGOMERY, PH.D. has been a Director since November 1989 and has
been Secretary and Chief Scientific Officer since joining BioCryst in February
1990. He was Executive Vice President from February 1990 until May 1997, at
which time he was named Senior Vice President. Dr. Montgomery was a Founder of
BioCryst. Prior to joining BioCryst, Dr. Montgomery served as Senior Vice
President of Southern Research Institute of Birmingham from January 1981 to
February 1990. He continues to hold the position of Distinguished Scientist at
Southern Research Institute, a position he has held since February 1990.


    RONALD E. GRAY joined BioCryst in January 1993 as Chief Financial Officer.
Mr. Gray received the additional title of Assistant Secretary in December 1993
and Treasurer in January, 1995. Prior to


                                       39
<PAGE>
joining BioCryst, from June 1992 to September 1992, Mr. Gray was Chief Financial
Officer of The ACB Companies, a collection agency. From July 1988 to March 1992,
Mr. Gray was Chief Financial Officer and Secretary of Image Data Corporation, a
medical imaging company. He was previously Vice President of Finance, Secretary
and Treasurer of CyCare Systems, Inc., a health care information processing
company.


    JOHN R. UHRIN joined BioCryst in March 1998 as Vice President, Corporate
Development with 21 years of sales and marketing experience in the
pharmaceutical, biotechnology, medical and managed care industries. He joined
BioCryst following 11 years at Genentech, Inc. From 1987 to 1998, he held
various management positions at Genentech, most recently as Director of Special
Markets/Managed Care. Prior to working for Genentech, he held various sales and
management positions with Eli Lilly from 1977 to 1987.


    WILLIAM W. FEATHERINGILL was elected a Director in May 1995. Since June
1995, Mr. Featheringill has been Chairman and Chief Executive Officer of
Electronic Healthcare Systems, a software company, and President, Chief
Executive Officer and director, since 1973, of Private Capital Corporation, a
venture capital management company. From 1988 to 1995, Mr. Featheringill was
Chairman and Chief Executive Officer of MACESS Corporation, which designs and
installs paperless data management systems for the managed care industry. MACESS
Corporation merged with Sungard Data Systems in late 1995. From 1985 to December
1994, Mr. Featheringill was the developer, Chairman and President of Complete
Health Services, Inc., a health maintenance organization. Complete Health
Services, Inc. was acquired by United HealthCare Corporation in June 1994. Mr.
Featheringill is a director of Citation Corporation.

    EDWIN A. GEE, PH.D. was elected a Director in August 1993. Dr. Gee, who
retired in 1985 as Chairman of the Board and Chief Executive Officer of
International Paper Company, has been active as an executive in biotechnology,
pharmaceutical and specialty chemical companies since 1970. He is Chairman
Emeritus and a director of OSI Pharmaceuticals, Inc., one of the leading
biotechnology companies for the diagnosis and treatment of cancer.

    ZOLA P. HOROVITZ, PH.D. was elected a Director in August 1994. Dr. Horovitz
was Vice President of Business Development and Planning at Bristol-Myers Squibb
from 1991 until his retirement in April 1994 and previously was Vice President
of Licensing at the same company from 1990 to 1991. Prior to 1990, he spent over
30 years with The Squibb Institute for Medical Research, most recently as Vice
President Research, Planning, & Scientific Liaison. He has been an independent
consultant in pharmaceutical sciences and business development since his
retirement from Bristol-Myers Squibb in April 1994. He serves on the Board of
Directors of Avigen, Inc., Clinicor Inc., Diacrin, Inc., Magainin
Pharmaceuticals, Inc., Procept Corporation, Roberts Pharmaceutical Corporation
and Synaptic Pharmaceutical Corp. Dr. Horovitz is also Chairman of Magainin
Pharmaceuticals, Inc.

    JOSEPH H. SHERRILL, JR. was elected a Director in May 1995. Mr. Sherrill
served as President of R.J. Reynolds Asia Pacific, based in Hong Kong, where he
oversaw R.J. Reynolds' operations across Asia, including licensing, joint
ventures and a full line of operating companies from August 1989 to his
retirement in October 1994. Prior management positions with R.J. Reynolds
include Senior Vice President of Marketing for R.J. Reynolds International,
President and Chief Executive Officer of R.J. Reynolds Tabacos de Brazil, and
President and General Manager of R.J. Reynolds Puerto Rico.


    WILLIAM M. SPENCER, III was a Founder and has been a Director of BioCryst
since its inception. He served as Chairman of the Board of BioCryst from its
founding in 1986 until April 1992. He co-founded and operated Motion Industries
from 1946 through its merger into Genuine Parts Company in 1976. He has founded
several businesses and has served on the Board of Directors of numerous private
corporations.


    RANDOLPH C. STEER, M.D., PH.D. was elected a Director in February 1993. Dr.
Steer has been active as a consultant to biotechnology and pharmaceutical
companies since 1989. Dr. Steer serves on the Board of Directors of Techne
Corporation.

                                       40
<PAGE>
                             PRINCIPAL STOCKHOLDERS


    The following table shows information regarding beneficial ownership of our
common stock as of September 20, 1999 by:


    - each of our directors and executive officers;

    - all directors and executive officers as a group; and

    - each person known by us to be the beneficial owner of more than five
      percent of our common stock.

<TABLE>
<CAPTION>
                                                                                             PERCENT OF
                                                                                            COMMON STOCK
                                                                          NUMBER OF      BENEFICIALLY OWNED
                                                                            SHARES    ------------------------
                                                                          BENEFICIALLY   BEFORE       AFTER
                        NAME OF BENEFICIAL OWNER                           OWNED(1)    OFFERING     OFFERING
- ------------------------------------------------------------------------  ----------  -----------  -----------
<S>                                                                       <C>         <C>          <C>

William W. Featheringill................................................   2,699,872(2)       17.7%       15.6%
100 Brookwood Place #410
Birmingham, Alabama 35209

Johnson & Johnson Development Corporation...............................     918,836(3)        6.0        5.3
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933

Max Cooper..............................................................     780,100(4)        5.1        4.5
121 Summit Parkway
Birmingham, Alabama 35209

Charles E. Bugg, Ph.D...................................................     609,127(5)        3.9        3.4

William M. Spencer, III.................................................     539,858(6)        3.5        3.1

Joseph H. Sherrill, Jr..................................................     421,500(7)        2.8        2.4

John A. Montgomery, Ph.D. ..............................................     160,620(8)        1.0        0.9

J. Claude Bennett, M.D. ................................................     107,460(9)          *          *

Ronald E. Gray..........................................................      88,672 10)          *          *

Randolph C. Steer, M.D., Ph.D. .........................................      74,999 11)          *          *

Zola P. Horovitz, Ph.D..................................................      43,749 11)          *          *

Edwin A. Gee, Ph.D. ....................................................      39,999 11)          *          *

John R. Uhrin...........................................................      26,246 12)          *          *

All executive officers and directors as a group (11 persons)............   4,812,102 13)       29.4       26.2
</TABLE>

- ------------------------

*   Less than one percent.

(1) Gives effect to the shares of common stock issuable within 60 days after
    September 20, 1999 upon the exercise of all options and other rights
    beneficially held by the indicated stockholder on that date.

(2) Includes 364,900 shares of common stock held by the Featheringill Family
    Trust of which he is a beneficial owner and 32,500 shares of common stock
    issuable upon exercise of stock options.

(3) Johnson & Johnson Development Corporation is a wholly owned subsidiary of
    Johnson & Johnson and shares investment and voting power with Johnson &
    Johnson.

(4) Based on filings made by Mr. Cooper with the SEC.

                                       41
<PAGE>
(5) Includes 539,084 shares of common stock issuable upon exercise of stock
    options.

(6) Includes 43,749 shares of common stock issuable upon exercise of stock
    options and 10,000 shares of common stock held by Mr. Spencer's spouse. Mr.
    Spencer disclaims beneficial ownership of the 10,000 shares of common stock
    held by his spouse.

(7) Includes 32,500 shares of common stock issuable upon exercise of stock
    options, 10,000 shares of common stock which Mr. Sherrill holds jointly with
    his spouse, 1,000 shares of common stock held by Mr. Sherrill's son and
    10,000 shares of common stock held by Mr. Sherrill's spouse. Mr. Sherrill
    disclaims beneficial ownership of the 11,000 shares of common stock held by
    his spouse and son.

(8) Includes 127,498 shares of common stock issuable upon exercise of stock
    options and 12,600 shares of common stock held by Dr. Montgomery's spouse.
    Dr. Montgomery disclaims beneficial ownership of the 12,600 shares of common
    stock held by his spouse.

(9) Includes 102,725 shares of common stock issuable upon exercise of stock
    options.

(10) Includes 1,500 shares of common stock held by the retirement accounts of
    Mr. Gray and his spouse and 78,394 shares of common stock issuable upon
    exercise of stock options.

(11) Represents shares of common stock issuable upon exercise of stock options.

(12) Includes 21,666 shares of common stock issuable upon exercise of stock
    options.


(13) See Note (2) and Notes (5) through (12).


                                       42
<PAGE>
                  RELATIONSHIPS AND RELATED PARTY TRANSACTIONS


    Dr. Charles E. Bugg, an executive officer and Director of BioCryst, is a
Professor Emeritus of The University of Alabama at Birmingham and is paid an
annual stipend of $9,040 by The University of Alabama at Birmingham. Dr.
Bennett, an executive officer and Director of BioCryst, is a consultant to and a
Distinguished University Professor of The University of Alabama at Birmingham
and is paid an annual stipend of $12,500 by The University of Alabama at
Birmingham Education Foundation. We paid approximately $877,000 in 1998 and
approximately $281,000 in the eight months ended August 31, 1999 to The
University of Alabama at Birmingham for royalty payments, conducting clinical
trials, research and data analysis.



    Dr. John A. Montgomery, an executive officer and Director of BioCryst, is a
former executive officer of Southern Research Institute. He is currently a
Distinguished Scientist at Southern Research Institute and was paid
approximately $6,482 by Southern Research Institute in 1998 for various
consulting services unrelated to the services performed by Southern Research
Institute for us. We paid approximately $209,000 in 1998 and approximately
$28,000 in the eight months ended August 31, 1999 to Southern Research Institute
for research, library use and supplies.



    Johnson & Johnson Development Corporation owns 918,836 shares of our common
stock, which represents 6% of our common stock before the offering and 5.3%
after the offering. Johnson & Johnson Development Corporation, the R.W. Johnson
Pharmaceutical Research Institute and Ortho-McNeil are all Johnson & Johnson
companies. In September 1998, we entered into an exclusive worldwide license
agreement with The R.W. Johnson Pharmaceutical Research Institute and
Ortho-McNeil to develop and market our proprietary influenza neuraminidase
inhibitors. We received an initial $6.0 million payment from Ortho-McNeil and an
additional $6.0 million common stock equity investment from Johnson & Johnson
Development Corporation. In June 1999, we received a $2.0 million milestone
payment from Ortho-McNeil in connection with the initiation of Phase II clinical
testing in the United States. In addition, we may receive cash payments upon
achievement of specified developmental and regulatory milestones and royalties
on product sales, if any. The R.W. Johnson Pharmaceutical Research Institute and
Ortho-McNeil are responsible for all development, regulatory and
commercialization expenses. The agreement is subject to termination by The R.W.
Johnson Pharmaceutical Research Institute and Ortho-McNeil at any time and by us
in certain circumstances.


                                       43
<PAGE>
                                  UNDERWRITING


    Subject to the terms and conditions stated in the underwriting agreement,
each underwriter named below has severally agreed to purchase, and we have
agreed to sell to such underwriter, the number of shares set forth opposite the
name of such underwriter.


<TABLE>
<CAPTION>
                                                                                     NUMBER
           NAME                                                                    OF SHARES
- ---------------------------------------------------------------------------------  ----------
<S>                                                                                <C>
Salomon Smith Barney Inc. .......................................................
Hambrecht & Quist LLC............................................................
Raymond James & Associates, Inc..................................................
                                                                                   ----------
  Total..........................................................................   2,000,000
                                                                                   ----------
                                                                                   ----------
</TABLE>


    The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
approval of legal matters by counsel other conditions, including receipt of
certificates from us, receipt of letters from our accountants, the status of the
trading of our common stock on Nasdaq or securities on the New York Stock
Exchange or Nasdaq and the absence of a banking moratorium, hostilities or a
crisis. The underwriters are obligated to purchase all the shares (other than
those covered by the over-allotment option described below) if they purchase any
of the shares.



    The underwriters propose to offer some of the shares directly to the public
at the public offering price set forth on the cover page of this prospectus and
some of the shares to certain dealers at the public offering price less a
concession not in excess of $           per share. The underwriters may allow,
and such dealers may reallow, a concession not in excess of $           per
share on sales to other dealers. If all of the shares are not sold at the
initial offering price, the representatives may change the public offering price
and the other selling terms.



    We have granted the underwriters a 30-day option to purchase up to an
additional 300,000 shares to cover over-allotments, if any. The underwriters may
exercise such option solely for the purpose of covering over-allotments, if any,
in connection with this offering. To the extent such option is exercised, each
underwriter will be obligated, subject to the conditions stated above, to
purchase a number of additional shares approximately proportionate to such
underwriter's initial purchase commitment.



    Our officers and directors and Johnson & Johnson Development Corporation
have agreed that, for a period of 90 days from the date of this prospectus, they
will not, without the prior written consent of Salomon Smith Barney Inc.,
dispose of or hedge any shares of our common stock or any securities convertible
into or exchangeable for common stock. Salomon Smith Barney Inc. in its sole
discretion may release any of the securities subject to these lock-up agreements
at any time without notice.


    The common stock is quoted on the Nasdaq National Market under the symbol
"BCRX."


    The following table shows the underwriting discounts and commissions to be
paid to the underwriters by us in connection with this offering. These amounts
are shown assuming both no exercise and full exercise of the underwriters'
option to purchase additional shares of common stock.



<TABLE>
<CAPTION>
                                                                            PAID TO US
                                                                     -------------------------
<S>                                                                  <C>          <C>
                                                                                      FULL
                                                                     NO EXERCISE    EXERCISE
                                                                     -----------  ------------
Per share..........................................................   $            $
Total..............................................................   $            $
</TABLE>


    In connection with the offering, Salomon Smith Barney Inc., on behalf of the
underwriters, may purchase and sell shares of common stock in the open market.
These transactions may include

                                       44
<PAGE>

over-allotment, syndicate covering transactions and stabilizing transactions.
Over-allotment involves syndicate sales of common stock in excess of the number
of shares to be purchased by the underwriters in the offering, which creates a
syndicate short position. Syndicate covering transactions involve purchases of
the common stock in the open market after the distribution has been completed in
order to cover syndicate short positions. Stabilizing transactions consist of
certain bids or purchases of common stock made for the purpose of preventing or
retarding a decline in the market of price of the common stock while the
offering is in progress.


    The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases shares originally sold by that syndicate
member.

    Any of these activities may cause the price of the common stock to be higher
than the price that otherwise would exist in the open market in the absence of
such transactions. These transactions may be effected on the Nasdaq National
Market or in the over-the-counter market, or otherwise and, if commenced, may be
discontinued at any time.


    In addition, in connection with this offering, the underwriters (and selling
group members) may engage in passive market making transactions in the common
stock on the Nasdaq National Market, prior to the pricing and completion of the
offering. Passive market making consists of displaying bids on the Nasdaq
National Market no higher than the bid prices of independent market makers and
making purchases at prices no higher than those independent bids and effected in
response to order flow. Net purchases by a passive market maker on each day are
limited to a specified percentage of the passive market maker's average daily
trading volume in the common stock during a specified period and must be
discontinued when such limit is reached. Passive market making may cause the
price of the common stock to be higher than the price that otherwise would exist
in the open market in the absence of such transactions. If passive market making
is commenced, it may be discontinued at any time.



    We estimate that the total expenses, excluding underwriting discounts and
commissions, of this offering will be $550,000.



    We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.


                                       45
<PAGE>
                                 LEGAL MATTERS


    The validity of the common stock offered in this prospectus will be passed
upon for BioCryst by Brobeck, Phleger & Harrison LLP, Broomfield, Colorado. As
of October 8, 1999, a member of Brobeck, Phleger & Harrison LLP beneficially
owned a total of 5,000 shares of our common stock. Other legal matters in
connection with this offering will be passed upon for the underwriters by
Cravath, Swaine & Moore, New York, New York.


                                    EXPERTS

    Ernst & Young LLP, independent auditors, have audited our financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in this registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.

    The statements in this prospectus under the sections "Risk Factors--We may
fail to adequately protect or enforce our intellectual property rights or secure
rights to third-party patents" and "Business--Patents and Proprietary
Information" and other references in this prospectus to U.S. patent matters have
been reviewed and approved by Pollock, Vande Sande & Amernick, R.L.L.P., our
patent counsel, as experts on such matters and are included in this prospectus
in reliance upon that review and approval.

                                       46
<PAGE>

                      WHERE YOU CAN FIND MORE INFORMATION



    We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission, or the SEC. You may
read and copy any document we file at the public reference facilities of the SEC
located at 450 Fifth Street, N.W., Washington D.C. 20549. You may obtain
information on the operation of the SEC's public reference facilities by calling
the SEC at 1-800-SEC-0330. You can also access copies of such material
electronically on the SEC's home page on the World Wide Web at
http://www.sec.gov.



    This prospectus is part of a registration statement (Registration No.
333-87669) we filed with the SEC. The SEC permits us to "incorporate by
reference" the information that we file with them, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file with the SEC after the date of this
prospectus will automatically update and supercede this information. We
incorporate by reference the following documents filed by us with the SEC (File
No. 0-27066). We also incorporate by reference any future filings made with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, after the date of this prospectus until the termination of
this offering:



    1.  Our Annual Report on Form 10-K for the fiscal year ended December 31,
       1998.



    2.  Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
       and June 30, 1999.



    3.  Our Proxy Statement dated April 2, 1999 filed in connection with our
       1999 Annual Meeting of Stockholders.



    4.  The description of our common stock which is contained in our
       registration statement on Form 8-A filed under the Exchange Act on
       January 8, 1994, including any amendment or reports filed for the purpose
       of updating such description.



    If you request a copy of any or all of the documents incorporated by
reference, we will send to you the copies requested at no charge. However, we
will not send exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents. You should direct requests for such
copies to: Mr. Ronald E. Gray, Chief Financial Officer, BioCryst
Pharmaceuticals, Inc., 2190 Parkway Lake Drive, Birmingham, Alabama 35244, (205)
444-4600.


                                       47
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                2,000,000 SHARES

                                     [LOGO]

                                  COMMON STOCK

                                     ------

                              P R O S P E C T U S

                                          , 1999

                                   ---------

                              SALOMON SMITH BARNEY
                               HAMBRECHT & QUIST
                        RAYMOND JAMES & ASSOCIATES, INC.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION


    The following table sets forth all costs and expenses, other than the
underwriting discounts and commissions, payable by the company in connection
with the sale of common stock being registered hereby. All of the amounts shown
are estimates except the SEC registration fee, the NASD filing fee and the
Nasdaq National Market additional listing fee.



<TABLE>
<CAPTION>
                                                                                      AMOUNT
                                                                                    TO BE PAID
                                                                                    ----------
<S>                                                                                 <C>
SEC registration fee..............................................................  $   15,985
NASD filing fee...................................................................       6,250
Nasdaq additional listing of shares fee...........................................      17,500
Accounting fees and expenses......................................................      40,000
Legal fees and expenses...........................................................     260,000
Printing and engraving expenses...................................................     150,000
Transfer Agent and registrar fees.................................................       5,000
Miscellaneous.....................................................................      55,265
                                                                                    ----------
Total.............................................................................  $  550,000
                                                                                    ----------
                                                                                    ----------
</TABLE>


ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

    Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article Eight of the Registrant's Composite Certificate
of Incorporation provides for indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Registrant has liability
insurance for its Directors and Officers.

                                      II-1
<PAGE>
ITEM 16. EXHIBITS

    The following is a list of Exhibits filed as part of the Registration
Statement:


<TABLE>
<C>        <S>
      1.1  Form of Underwriting Agreement.++

      4.1  Specimen certificate for shares of the Registrant's Common Stock, incorporated herein
           by reference to Exhibit 4.1 the Registrant's Registration Statement No. 33-73868.

      4.2  Provisions of the Composite Certificate of Incorporation and By-Laws of the Registrant
           defining rights of holders of Common Stock of the Registrant, incorporated herein by
           reference to Exhibits 3.1 and 3.2 to the Company's Form 10-Q for the second quarter
           ending June 30, 1995 dated August 11, 1995.

      5.1  Opinion of Brobeck, Phleger & Harrison LLP.++

     23.1  Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed as Exhibit
           5.1).

     23.2  Consent of Ernst & Young LLP, independent accountants.

     23.3  Consent of Pollock, Vande Sande & Amernick, R.L.L.P., special patent counsel to the
           Registrant.++

     24.1  Power of Attorney (included with signature page).+

     27.1  Financial Data Schedule.+
</TABLE>


- ------------------------


+   Previously filed on September 23, 1999.



++  To be filed by amendment.


ITEM 17. UNDERTAKINGS


    Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.


    The undersigned Registrant hereby undertakes:

        (1) To file, during any period in which offers or sales are being made
            of the securities offered hereby, a post-effective amendment to this
            Registration Statement;


        (i) To include any prospectus required by Section 10(a)(3) of the Act;


        (ii) To reflect in the prospectus any facts or events arising after the
             effective date of the registration statement (or the most recent
             post-effective amendment thereof) which, individually or in the
             aggregate, represent a fundamental change in the information set
             forth in the registration statement. Notwithstanding the foregoing,
             any increase or decrease in volume of securities offered (if the
             total dollar value of securities offered would not exceed that
             which was registered) and any deviation from the low or high end of
             the estimated maximum offering range may be reflected in the form
             of prospectus filed with the Commission pursuant to Rule 424(b) if,
             in the aggregate, the changes in volume and

                                      II-2
<PAGE>
             price represent no more than a 20 percent change in the maximum
             aggregate offering price set forth in the "Calculation of
             Registration Fee" table in the effective registration statement;

       (iii) To include any material information with respect to the plan of
             distribution not previously disclosed in the registration statement
             or any material change to such information in the registration
             statement;


provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in this registration statement.



        (2) That, for the purpose of determining any liability under the Act,
    each such post-effective amendment shall be deemed to be a new registration
    statement relating to the securities offered therein, and the offering of
    such securities at that time shall be deemed to be the initial bona fide
    offering thereof.


        (3) To remove from registration by means of a post-effective amendment
    any of the securities being registered which remain unsold at the
    termination of the offering.


    The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.


    The undersigned Registrant hereby undertakes that:


        (1) For purposes of determining any liability under the Act, the
    information omitted from the form of prospectus filed as part of this
    Registration Statement in reliance upon Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
    497(h) under the Act shall be deemed to be part of this Registration
    Statement as of the time it was declared effective.



        (2) For the purpose of determining any liability under the Act, each
    post-effective amendment that contains a form of prospectus shall be deemed
    to be a new registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall be deemed to
    be the initial bona fide offering thereof.


                                      II-3
<PAGE>
                                   SIGNATURES


    Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama, on October 8, 1999.


<TABLE>
<S>                                           <C>        <C>
                                              BIOCRYST PHARMACEUTICALS, INC.

                                              By:        /s/ CHARLES E. BUGG
                                                         ----------------------------------------
                                                         Charles E. Bugg, Ph.D. Chairman and Chief
                                                         Executive Officer
</TABLE>


    Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 8, 1999.



<TABLE>
<CAPTION>
                       SIGNATURE                                                   TITLE
- --------------------------------------------------------  --------------------------------------------------------
<C>                                                       <S>
                  /s/ CHARLES E. BUGG                     Chairman, Chief Executive Officer and Director
      --------------------------------------------          (principal executive officer)
                 Charles E. Bugg, Ph.D.

                           *                              President, Chief Operating Officer and Director
      --------------------------------------------
                J. Claude Bennett, M.D.

                           *                              Senior Vice President, Secretary, Chief Scientific
      --------------------------------------------          Officer and Director
               John A. Montgomery, Ph.D.

                           *                              Chief Financial Officer (principal financial and
      --------------------------------------------          accounting officer)
                     Ronald E. Gray

                           *                              Director
      --------------------------------------------
                William W. Featheringill

                           *                              Director
      --------------------------------------------
                  Edwin A. Gee, Ph.D.

                           *                              Director
      --------------------------------------------
                Zola P. Horovitz, Ph.D.

                           *                              Director
      --------------------------------------------
                Joseph H. Sherrill, Jr.

                           *                              Director
      --------------------------------------------
                William M. Spencer, III

                           *                              Director
      --------------------------------------------
             Randolph C. Steer, M.D., Ph.D.
</TABLE>



<TABLE>
<S>   <C>                        <C>                         <C>
*By:     /s/ CHARLES E. BUGG
      -------------------------
       Charles E. Bugg, Ph.D.
         ATTORNEY-IN-FACT**
</TABLE>


- ------------------------


**  Pursuant to the power of attorney filed as part of the signature page to the
    Registration Statement on Form S-3, No. 333-87669, filed September 23, 1999.


                                      II-4
<PAGE>
                                 EXHIBIT INDEX


<TABLE>
<C>        <S>
      1.1  Form of Underwriting Agreement.++

      4.1  Specimen certificate for shares of the Registrant's Common Stock, incorporated herein
           by reference to Exhibit 4.1 the Registrant's Registration Statement No. 33-73868.

      4.2  Provisions of the Composite Certificate of Incorporation and By-Laws of the Registrant
           defining rights of holders of Common Stock of the Registrant, incorporated herein by
           reference to Exhibits 3.1 and 3.2 to the Company's Form 10-Q for the second quarter
           ending June 30, 1995 dated August 11, 1995.

      5.1  Opinion of Brobeck, Phleger & Harrison LLP.++

     23.1  Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed as Exhibit
           5.1).

     23.2  Consent of Ernst & Young LLP, independent accountants.

     23.3  Consent of Pollock, Vande Sande & Amernick, R.L.L.P., special patent counsel to the
           Registrant.++

     24.1  Power of Attorney (included with signature page).+

     27.1  Financial Data Schedule.+
</TABLE>


- ------------------------


 + Previously filed on September 23, 1999.



++  To be filed by amendment.


<PAGE>
                                                                    EXHIBIT 23.2

                          CONSENT OF ERNST & YOUNG LLP
                              INDEPENDENT AUDITORS


    We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 333-87669) and the related Prospectus of
BioCryst Pharmaceuticals, Inc. for the registration of 2,300,000 shares of its
common stock and to the incorporation by reference therein of our report dated
January 15, 1999, with respect to the financial statements of BioCryst
Pharmaceuticals, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1998, filed with the Securities and Exchange Commission.



                                                  /s/ Ernst & Young LLP



Birmingham, Alabama
October 8, 1999



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