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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
---- ----
Commission File Number 000-23186
BIOCRYST PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1413174
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) no.)
2190 Parkway Lake Drive; Birmingham, Alabama 35244
(Address and zip code of principal executive offices)
(205) 444-4600
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 14,987,032 shares of the
Company's Common Stock, $.01 par value, were outstanding as of April 29, 1999.
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BIOCRYST PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information PAGE NO.
<S> <C> <C>
Item 1. Financial Statements:
Condensed Balance Sheets - March 31, 1999 and December 31, 1998 2
Condensed Statements of Operations - Three Months Ended March 31, 1999 and 1998 3
Condensed Statements of Cash Flows - Three Months Ended March 31, 1999 and 1998 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5
Part II. Other Information
Item 1. Legal Proceedings 16
Item 2. Changes in Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 18
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOCRYST PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
ASSETS (UNAUDITED) (NOTE 1)
<S> <C> <C>
Cash and cash equivalents $ 8,212,940 $ 12,311,348
Securities held-to-maturity 10,418,263 9,961,017
Prepaid expenses and other current assets 738,196 598,463
------------- ------------
Total current assets 19,369,399 22,870,828
Securities held-to-maturity 5,686,177 4,739,728
Furniture and equipment, net 1,466,634 1,407,780
Patents 161,114 81,723
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Total assets $ 26,683,324 $ 29,100,059
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 195,387 $ 243,075
Accrued expenses 534,861 611,455
Accrued taxes, other than income 82,284 136,726
Accrued vacation 108,035 91,919
Current maturities of capital lease obligations 13,156 12,603
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Total current liabilities 933,723 1,095,778
Obligations under capital lease obligations 18,362 21,866
Deferred license fee 300,000 300,000
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Total liabilities 1,252,085 1,417,644
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Stockholders' equity:
Convertible preferred stock, $.01 par value, shares
authorized - 5,000,000; shares issued and outstanding - none
Common stock, $.01 par value, shares authorized -
45,000,000; shares issued and outstanding -
14,987,032 in 1999 and 14,960,088 in 1998 149,870 149,600
Additional paid-in capital 80,851,426 80,702,381
Accumulated deficit (55,570,057) (53,169,566)
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Total stockholders' equity 25,431,239 27,682,415
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Total liabilities and stockholders' equity $ 26,683,324 $ 29,100,059
------------- ------------
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</TABLE>
See accompanying notes to condensed financial statements.
2
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Collaborative and other research and development $ 216,133 $
Interest and other 322,748 381,987
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Revenues 538,881 381,987
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Research and development 2,169,876 2,741,473
General and administrative 768,043 641,230
Interest 1,452 5,027
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Expenses 2,939,371 3,387,730
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Net loss $ (2,400,490) $ (3,005,743)
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Net loss per share (Note 2) $(.16) $(.22)
Weighted average shares outstanding (Note 2) 14,975,433 13,876,907
</TABLE>
See accompanying notes to condensed financial statements.
3
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BIOCRYST PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (2,400,490) $ (3,005,743)
Depreciation and amortization 124,362 149,406
Non-monetary compensation 12,267 12,267
Changes in operating assets and liabilities, net (381,734) 287,837
------------- -------------
Net cash used by operating activities (2,645,595) (2,556,233)
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INVESTING ACTIVITIES
Purchases of furniture and equipment (183,216) (219,810)
Purchase of marketable securities (4,975,912) (1,851,183)
Maturities of marketable securities 3,572,218 3,880,214
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Net cash (used)/provided by investing activities (1,586,910) 1,809,221
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FINANCING ACTIVITIES
Principal payments on debt and capital lease obligations (2,951) (16,237)
Proceeds from sale of common stock, net of issuance cost 137,048 507,962
------------- -------------
Net cash provided by financing activities 134,097 491,725
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(Decrease) in cash and cash equivalents (4,098,408) (255,287)
Cash and cash equivalents at beginning of period 12,311,348 3,757,098
------------- -------------
Cash and cash equivalents at end of period $ 8,212,940 $ 3,501,811
------------- -------------
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</TABLE>
See accompanying notes to condensed financial statements.
4
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BIOCRYST PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Basis of Preparation
The condensed balance sheet as of March 31, 1999 and the condensed statements of
operations and cash flows for the three months ended March 31, 1999 and 1998
have been prepared in accordance with generally accepted accounting principles
by BioCryst Pharmaceuticals, Inc. (the "Company" or "BioCryst") and have not
been audited. Such financial statements reflect all adjustments which are, in
management's opinion, necessary to present fairly, in all material respects, the
financial position at March 31, 1999 and the results of operations and cash
flows for the three months ended March 31, 1999 and 1998. These condensed
financial statements should be read in conjunction with the financial statements
for the year ended December 31, 1998 and the notes thereto included in the
Company's 1998 Annual Report. Interim operating results are not necessarily
indicative of operating results for the full year. The balance sheet as of
December 31, 1998 has been prepared from the audited financial statements
included in the previously mentioned Annual Report.
Note 2. Net Loss Per Share
The Company computes net loss per share in accordance with Statement of
Financial Accounting Standards No. 128, Earnings per Share. Net loss per share
is based upon the weighted average number of common shares outstanding during
the period. Common equivalent shares from unexercised stock options and warrants
are excluded from the computation as their effect is anti-dilutive. For the
three months ended March 31, 1999 and 1998, common stock equivalents of
approximately 2,488,174 and 2,424,011 shares, respectively, were not used to
calculate diluted income (loss) per share because of their anti-dilutive effect.
There were no reconciling items in calculating the numerator for net loss per
share for any of the periods presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS CERTAIN STATEMENTS OF
A FORWARD-LOOKING NATURE RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL
PERFORMANCE OF THE COMPANY. SUCH STATEMENTS ARE ONLY PREDICTIONS AND THE ACTUAL
EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AS WELL AS THOSE DISCUSSED IN OTHER
FILINGS MADE BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K.
OVERVIEW
Since its inception in 1986, the Company has been engaged in research and
development activities (including drug discovery, manufacturing compounds,
conducting preclinical studies and clinical trials) and organizational efforts
(including recruiting its scientific and management personnel), establishing
laboratory facilities, engaging its Scientific Advisory Board and raising
capital. The Company has not received any revenue from the sale of
pharmaceutical products and does not expect to receive such revenues to a
significant extent for at least several years, if at all. The Company has
incurred operating losses since its inception. The Company expects to incur
significant additional operating losses over the next several years. Such losses
may increase as the Company's research and development and clinical trial
efforts continue.
RESULTS OF OPERATIONS (FIRST THREE MONTHS OF 1999 COMPARED TO THE FIRST THREE
MONTHS OF 1998)
Revenues increased 41.1% to $538,881 in the first three months of 1999 from
$381,987 in the first three months of 1998. The increase was primarily
attributable to work performed for one of BioCryst's collaborative partners,
offset by the decrease in interest income due to the lower rate of interest
earned on invested funds in 1999 versus 1998.
Research and development expenses decreased 20.8% to $2,169,876 in the first
three months of 1999 from
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$2,741,473 in the first three months of 1998. The decrease is primarily
attributable to a decrease in costs associated with conducting 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 the Company's research projects and collaborative efforts.
General and administrative expenses increased 19.8% to $768,043 in the first
three months of 1999 from $641,230 in the first three months of 1998. The
increase is primarily the result of printing the annual report in the first
quarter of 1999 versus the second quarter of 1998 and increased personnel costs.
LIQUIDITY AND CAPITAL RESOURCES
Cash expenditures have exceeded revenues since the Company's inception.
Operations have principally been funded through public offerings of common
stock, private placements of equity and debt securities, equipment lease
financing, facility leases, collaborative and other research and development
agreements (including a license and options for licenses), research grants and
interest income. In addition, the Company has attempted to contain costs and
reduce cash flow requirements by renting scientific equipment or facilities,
contracting with third parties to conduct certain research and development and
using consultants. The Company expects to incur additional expenses, resulting
in significant losses, as it continues its research and development activities
and undertakes additional preclinical studies and clinical trials of compounds
which have been or may be discovered. The Company also expects to incur
substantial administrative, manufacturing and commercialization expenditures in
the future as it seeks Food and Drug Administration (the "FDA") approval for its
compounds and establishes its manufacturing capability under good manufacturing
practices ("GMP"), and substantial expenses related to the filing, prosecution,
maintenance, defense and enforcement of patent and other intellectual property
claims.
At March 31, 1999, the Company's cash, cash equivalents and securities
held-to-maturity were $24.3 million, a decrease of $2.7 million from December
31,1998 principally due to the cash used by operations for the three months
ended March 31, 1999.
The Company has financed its equipment purchases primarily with lease lines of
credit. The Company currently has a $500,000 line of credit with its bank to
finance capital equipment. In January 1992, the Company entered into an
operating lease for its current facilities which, based on an extension signed
in June 1998, expires on June 30, 2003, with an option to lease for an
additional three years at current market rates. The operating lease requires the
Company to pay monthly rent (ranging from $21,405 and escalating annually to a
minimum of $21,814 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, the Company 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.
Pursuant to the September 1998 license agreement for the Company's influenza
neuraminidase inhibitors, Ortho-McNeil Pharmaceutical, Inc. ("Ortho-McNeil") and
the R. W. Johnson Pharmaceutical Research Institute ("PRI"), both Johnson &
Johnson companies, paid the Company an initial $6.0 million for reimbursement of
research and development expenses and license fees and Johnson & Johnson
Development Corporation ("JJDC"), another Johnson & Johnson company, pursuant to
the Stock Purchase Agreement, made a $6.0 million equity investment in the
Company. While the License Agreement provides for potential milestone payments
of up to an additional $43.0 million and royalties on future sales of licensed
products, there can be no assurance that PRI will continue to develop the
product or, that if it does so, it will result in meeting the milestones or
achieving future sales of licensed products. The Company also entered into an
exclusive license agreement with Torii Pharmaceutical Co., Ltd. ("Torii") under
which Torii paid the Company $1.5 million in initial license fees and made a
$1.5 million equity investment in the Company in 1996. The first milestone
payment of $1.0 million was received in 1997. While the Torii license agreement
provides for potential milestone payments of up to an additional $18.0 million
and royalties on future sales of licensed products in Japan, there can be no
assurance that Torii will continue to develop the product in Japan or, that if
it does so, that it will result in meeting the milestones or achieving future
sales of licensed products in Japan.
6
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The Company plans to finance its needs principally from its existing capital
resources and interest thereon, from payments under collaborative and licensing
agreements with corporate partners, and to the extent available, through lease
or loan financing and future public or private financings. The Company believes
that its available funds will be sufficient to fund the Company's operations at
least through the end of 2000. However, this is a forward-looking statement, and
no assurance can be given that there will be no change that would consume
available resources significantly before such time. The Company's long-term
capital requirements and the adequacy of its available funds will depend upon
many factors, including results of research and development, results of
preclinical studies and clinical trials, relationships with strategic partners,
changes in the focus and direction of the Company's research and development
programs, competitive and technological advances, changes in existing
collaborative, licensing, research or development relationships, the ability of
the Company to establish additional collaborative relationships and the FDA
regulatory process. Additional funding, whether through additional sales of
securities or collaborative or other arrangements with corporate partners or
from other sources, may not be available when needed or on terms acceptable to
the Company. 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 existing stockholders of the
Company. In addition, collaborative arrangements may require the Company to
transfer certain material rights to such corporate partners. Insufficient funds
may require the Company to delay, scale-back or eliminate certain of its
research and development programs or to license third parties to commercialize
products or technologies that the Company would otherwise undertake itself.
RISKS ASSOCIATED WITH THE YEAR 2000
The year 2000 issue ("Year 2000 Issue") is the result of computer programs being
written using two digits rather than four digits to represent the year and
affects both information technology (IT) and non-IT systems. 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 among others, a temporary inability to
process certain data or engage in similar normal business activities.
PLAN AND STATUS. The Company's plan to resolve the Year 2000 Issue involves four
phases: assessment, remediation, testing and implementation. The Company has
completed its assessment of its IT systems. In 1997, the Company installed a
computer network, upgraded its MacIntosh computers to IBM compatible personal
computers and upgraded its IT software to a common standard. As a consequence,
most of its IT systems are identified by the manufacturer as Year 2000
compliant. The Company is completing its assessment of non-IT systems, most of
which is equipment used in the laboratories. Major vendors and suppliers have
been contacted with regard to their Year 2000 compliance and the Company will
continue to monitor their compliance. The Company has completed its assessment.
Systems identified as not being Year 2000 compliant will be brought into
compliance by upgrading either the software or hardware. The Company expects to
begin remediation and testing in the second quarter of 1999 and to be fully
implemented by the end of the third quarter of 1999.
While the Company has queried its significant suppliers, vendors and other
outside parties and will continue to monitor their Year 2000 compliance status,
the Company has 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
resolution process in a timely fashion could materially impact the Company. The
effect of non-compliance by suppliers, vendors and outside parties is not
determinable.
COSTS. The costs incurred to date for Year 2000 compliance have not been
material (less than $50,000) and are not expected to be material when completed
(less than $100,000). The Company anticipates that it will be able to fund its
costs from current funds available for operations. If, however, the costs are
higher than anticipated, this could have a material adverse effect on the
Company's business, results of operations and financial condition.
RISKS. While management of the Company believes it has an effective program in
place to resolve the Year 2000 Issue in a timely manner, as noted above, the
Company has not completed all necessary phases of the Year 2000 program for
compliance. In the event that the Company or third parties do not complete any
additional phases, the Company may not be able to complete the testing of its
compounds and advancing its projects into human clinical
7
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trials in support of an NDA filing. In addition, disruptions in the economy
generally resulting from Year 2000 Issues could also materially adversely effect
the Company. The Company is unable to estimate if it has any potential liability
or potential lost revenue at this time. There can be no assurance that the
Company will not discover Year 2000 compliance issues that will have a material
adverse effect on the Company's business, results of operations and financial
condition.
CONTINGENCY. The Company has contingency plans for certain critical applications
and is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds, increasing inventories and adjusting staffing
strategies. There can be no assurance that these contingency plans will be
adequate.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS, FINANCIAL CONDITION AND THE
MARKET PRICE OF SECURITIES
EARLY STAGE OF DEVELOPMENT; UNCERTAINTY OF PRODUCT DEVELOPMENT; TECHNOLOGICAL
UNCERTAINTY
BioCryst is at an early stage of development. All of the Company's compounds are
in research and development, and no revenues have been generated from sales of
its compounds. It will be a number of years, if ever, before the Company will
recognize significant revenues from product sales or royalties. To date, most of
the Company's resources have been dedicated to the research and development of
pharmaceutical compounds based upon its purine nucleoside phosphorylase ("PNP")
program for the treatment of T-cell proliferative diseases and disorders and for
the development of inhibitors of influenza neuraminidase and enzymes and
proteins involved in the complement cascade. The Company and PRI have conducted
preclinical studies with its influenza neuraminidase inhibitor and the Company
is conducting clinical studies with its lead drugs, BCX-34 and BCX-1470, and
results from these studies may not support future human clinical testing or
further development of the compounds. Phase III trials completed in 1997 with a
cream formulation of BCX-34 for treatment of cutaneous T-cell lymphoma ("CTCL")
and psoriasis and a Phase I/II trial completed in 1998 for a topical ointment
treatment for psoriasis did not show statistical efficacy. Accordingly, the
Company has discontinued further development of these topical formulations of
BCX-34, but is continuing its oral trials for BCX-34. T-cell proliferative
diseases, as well as the other disease indications the Company is studying, are
highly complex and their causes are not fully known. The Company's compounds
under development will require significant additional, time-consuming and costly
research and development, preclinical testing and extensive clinical testing
prior to submission of any regulatory application for commercial use. Product
development of new pharmaceuticals is highly uncertain, and unanticipated
developments, clinical or regulatory delays, unexpected adverse side effects or
inadequate therapeutic efficacy could slow or prevent product development
efforts and have a material adverse effect on the Company. One of BioCryst's
lead drugs, BCX-34, reversibly inhibits T-cell activity, an essential component
of the human immune system. In addition to any direct toxicities or side effects
the drug may cause, BCX-34, while inhibiting T-cells, may compromise the immune
system's ability to fight infection. Although the Company will monitor
immunosuppression during drug dosing, there can be no assurance that the drug
will not cause irreversible immunosuppression. There can be no assurance that
the Company's research or product development efforts as to any particular
compound will be successfully completed, that the compounds currently under
development will be safe or efficacious, that required regulatory approvals can
be obtained, that products can be manufactured at acceptable cost and with
appropriate quality or that any approved products can be successfully marketed
or will be accepted by patients, health care providers and third-party payors.
Few drugs discovered by use of structure-based drug design have been
successfully developed, approved by the FDA or marketed. Within the
pharmaceutical industry, treatment of the disease indications being pursued by
the Company, especially T-cell proliferative diseases such as CTCL and
psoriasis, have proven difficult. There can be no assurance that drugs resulting
from the approach of structure-based drug design employed by the Company will
overcome the difficulties of drug discovery and development or result in
commercially successful products.
UNCERTAINTY ASSOCIATED WITH PRECLINICAL AND CLINICAL TESTING
Before obtaining regulatory approvals for the commercial sale of any of its
products, BioCryst must undertake extensive preclinical and clinical testing to
demonstrate their safety and efficacy in humans. The Company has limited
experience in conducting clinical trials. To date, the Company has conducted
initial preclinical testing of certain of its compounds and is testing an oral
formulation of BCX-34 and an intravenous formulation of BCX-1470
8
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in various clinical trials. The results of initial preclinical and clinical
testing of compounds under development by the Company are neither necessarily
predictive of results that will be obtained from subsequent or more extensive
preclinical and clinical testing nor necessarily acceptable to the FDA to
support applications for marketing permits. However, the Company completed in
1997 two Phase III trials of a topical cream formulation and in 1998 a Phase
I/II trial of a topical ointment formulation of BCX-34 which did not show
statistical efficacy. Even if the results of subsequent clinical tests are
positive, products, if any, resulting from the Company's research and
development programs are not likely to be commercially available for several
years. Additionally, the Company has made and may in the future make changes to
the formulation of its drugs and/or to the processes for manufacturing its
drugs. Any such future changes in formulation or manufacturing processes could
result in delays in conducting further preclinical and clinical testing, in
unexpected adverse events in further preclinical and clinical testing, and/or in
additional development expenses. Furthermore, there can be no assurance that
clinical studies of products under development will be acceptable to the FDA or
demonstrate the safety and efficacy of such products at all or to the extent
necessary to obtain regulatory approvals of such products. Companies in the
industry have suffered significant setbacks in advanced clinical trials, even
after promising results in earlier trials. The failure to comply with good
clinical practices requirements for data integrity or to adequately demonstrate
the safety and efficacy of a therapeutic product under development could delay
or prevent regulatory approval of the product, and would have a material adverse
effect on the Company.
The rate of completion of clinical trials is dependent upon, among other
factors, the rate of enrollment of patients. Patient accrual is a function of
many factors, including the size of the patient population, the proximity of
patients to clinical sites, the eligibility criteria for the study and the
existence of competitive clinical trials. Delays in planned patient enrollment
in the Company's current trials or future clinical trials may result in
increased costs and/or program delays which could have a material adverse effect
on the Company.
DEPENDENCE ON COLLABORATIVE PARTNERS
The Company's strategy for research, development and commercialization of
certain of its products is to rely in part upon various arrangements with
corporate partners, licensees and others. As a result, the Company's products
are dependent in large part upon the subsequent success of such third parties in
performing preclinical studies and clinical trials, obtaining regulatory
approvals, manufacturing and marketing. The Company entered into an exclusive
license agreement with Ortho-McNeil and PRI in September 1998 to develop,
manufacture and commercialize its influenza neuraminidase inhibitor compounds
for the treatment and prevention of flu. The Company also entered into an
exclusive license agreement with Torii in May 1996 to develop, manufacture and
commercialize in Japan BCX-34 and certain other PNP inhibitor compounds for
three indications. The Company has also entered into collaborative arrangements
with 3-Dimensional Pharmaceuticals, Inc. to share resources and technology to
expedite the identification of inhibitors of key serine protease enzymes and
with Novartis Corporation, formerly Ciba-Geigy Corporation, ("Novartis") to
pursue development of certain types of PNP inhibitors. The Company intends to
pursue additional collaborations in the future. There can be no assurance that
the Company will be able to negotiate additional acceptable collaborative
arrangements or that such arrangements will be successful. No assurance can be
given that the Company's collaborative partners, particularly Ortho-McNeil and
PRI, will be able to obtain FDA approval for any licensed compounds, that any
such licensed compounds, if so approved, will be able to be commercialized
successfully, or that the Company will realize any revenues pursuant to such
arrangements, including any milestone or royalty payments under the License
Agreement. Although the Company believes that parties to collaborative
arrangements generally have an economic motivation to succeed in performing
their contractual responsibilities, the amount and timing of resources which
they devote to these activities are not within the control of the Company. There
can be no assurance that such parties will perform their obligations as expected
or that current or potential collaborators will not pursue treatments for other
diseases or seek alternative means of developing treatments for the diseases
targeted by collaborative programs with the Company or that any additional
revenues will be derived from such arrangements. If any of the Company's
collaborators breaches or terminates its agreement with the Company or otherwise
fails to conduct its collaborative activities in a timely manner, the
development or commercialization of the product candidate or research program
under such collaboration agreement may be delayed, the Company may be required
to undertake unforeseen additional responsibilities or to devote unforeseen
additional resources to such development or commercialization, or such
development or commercialization could be terminated. The termination or
cancellation of collaborative
9
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arrangements, particularly by Ortho-McNeil and PRI, could also adversely affect
the Company's financial condition, intellectual property position and
operations. In addition, disagreements between collaborators and the Company
have in the past and could in the future lead to delays in the collaborative
research, development or commercialization of certain product candidates, or
could require or result in legal process or arbitration for resolution. These
consequences could be time-consuming, expensive and could have material adverse
effects on the Company.
The successful commercialization of the Company's compounds and product
candidates is also dependent upon the Company's ability to develop collaborative
arrangements with academic institutions and consultants to support research and
development efforts and to conduct clinical trials. The Company's primary
academic collaboration has been with The University of Alabama at Birmingham
("UAB") to support its ongoing research and development programs. In 1998, the
Company completed its funding obligations with UAB for the development of
inhibitors for influenza neuraminidase and Factor D. UAB, however, will continue
to share in any revenues derived from those two projects and the Company intends
to continue using certain UAB faculty members as consultants to the Company.
There can be no assurance that the Company's current arrangements with UAB will
continue or that the Company will be able to develop successful collaborative
arrangements with academic institutions and consultants in the future.
GOVERNMENT REGULATION; NO ASSURANCE OF PRODUCT APPROVAL
The research, testing, manufacture, labeling, distribution, advertising,
marketing and sale of drug products are subject to extensive regulation by
governmental authorities in the United States and other countries. Prior to
marketing, compounds developed by the Company must undergo an extensive
regulatory approval process required by the FDA and by comparable agencies in
other countries. This process, which includes preclinical studies and clinical
trials of each compound to establish its safety and effectiveness and
confirmation by the FDA that good laboratory, clinical and manufacturing
practices were maintained during testing and manufacturing, can take many years,
requires the expenditure of substantial resources and gives larger companies
with greater financial resources a competitive advantage over the Company. To
date, no compound or drug candidate being evaluated by the Company has been
submitted for approval to the FDA or any other regulatory authority for
marketing, and there can be no assurance that any such compound or drug
candidate will ever be approved for marketing or that the Company will be able
to obtain the labeling claims desired for its compounds or drug candidates. The
Company is and will continue to be dependent upon the laboratories and medical
institutions conducting its preclinical studies and clinical trials to maintain
both good laboratory and good clinical practices and, except for the formulating
and packaging of small quantities of its drug formulations which the Company is
currently undertaking, upon the manufacturers of its compounds to maintain
compliance with current GMP requirements. Data obtained from preclinical studies
and clinical trials are subject to varying interpretations which could delay,
limit or prevent FDA regulatory approval. Delays or rejections may be
encountered based upon changes in FDA policy for drug approval during the period
of development and FDA regulatory review. Similar delays also may be encountered
in foreign countries. Moreover, even if approval is granted, such approval may
entail commercially unacceptable limitations on the labeling claims for which a
compound may be marketed. Even if such regulatory approval is obtained, a
marketed drug or compound and its manufacturer are subject to continual review
and inspection, and later discovery of previously unknown problems with the
product or manufacturer may result in restrictions or sanctions on such product
or manufacturer, including withdrawal of the product from the market, and other
enforcement actions.
In June 1995 the Company notified the FDA that it had submitted incorrect
efficacy data to the FDA pertaining to its Phase II dose-ranging studies of
BCX-34 for CTCL and psoriasis. The FDA inspected the Company in November 1995 in
relation to a study involving the topical application of BCX-34 concluded in
early 1995, and in June 1996 the FDA inspected the Company and one of its
clinical sites in relation to a Phase II dose-ranging study of BCX-34 for CTCL
and a Phase II dose ranging study for psoriasis, both of which were concluded in
early 1995. After each inspection, the FDA issued to the Company a List of
Inspectional Observations ("Form FDA 483") setting forth certain deficient Good
Clinical Practices procedures followed by the Company, some of which resulted in
submission to the FDA of efficacy data which reported false statistical
significance. The FDA also issued a Form FDA 483 to the principal investigator
at one of the Company's clinical sites citing numerous significant deficiencies
in the conduct of the Phase II dose-ranging studies of BCX-34 for CTCL and
psoriasis. These deficiencies included
10
<PAGE>
improper delegations of authority by the principal investigator, failures to
follow the protocols, institutional review board deviations, and discrepancies
or deficiencies in documentation and reporting. The Company received notice from
the FDA in November 1997 that work in support of products under FDA jurisdiction
performed by this investigator would not be accepted by the FDA without
validating information. Currently, the Company does not intend to pursue a
topical treatment for BCX-34, which is the clinical study this investigator
pursued for the Company. As a consequence of the FDA inspections and such
resulting Form FDA 483s, the Company's ongoing and future clinical studies may
receive increased scrutiny; this may delay the regulatory review process or
require the Company to increase the number of patients at other sites to obtain
approval (which can not be assured on a timely basis or at all). The Company has
adjusted certain of its procedures, but there can be no assurance that the FDA
will find such adjustments to be in compliance with FDA requirements or that,
even if it does find such adjustments to be in compliance, it will not seek to
impose administrative, civil or other sanctions in connection with the earlier
studies.
Such sanctions or other government regulation may delay or prevent the marketing
of products being developed by the Company, impose costly procedures upon the
Company's activities and confer a competitive advantage to larger companies or
companies that are more experienced in regulatory affairs and that compete with
the Company. There can be no assurance that FDA or other regulatory approval for
any products developed by the Company will be granted on a timely basis, or at
all. Delay in obtaining or failure to obtain such regulatory approvals will
materially adversely affect the marketing of any products which may be developed
by the Company, as well as the Company's results of operations.
HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT; UNCERTAINTY OF FUTURE
PROFITABILITY
BioCryst, to date, has generated no revenue from product sales and has incurred
losses since its inception. As of March 31, 1999, the Company's accumulated
deficit was approximately $55.6 million. Losses have resulted principally from
costs incurred in research activities aimed at discovering, designing and
developing the Company's pharmaceutical product candidates and from general and
administrative costs. These costs have exceeded the Company's revenues, which to
date have been generated primarily from collaborative arrangements, licenses,
research grants and from interest income. The Company expects to incur
significant additional operating losses over the next several years and expects
such losses to increase as the Company's research and development and clinical
trial efforts continue. The Company's ability to achieve profitability depends
in part upon its ability to develop drugs and to obtain regulatory approval for
its products that may be developed, to enter into agreements with collaborative
partners for product development, manufacturing and commercialization, and to
develop the capacity to manufacture, market and sell its products. There can be
no assurance that the Company will ever achieve significant revenues or
profitable operations.
ADDITIONAL FINANCING REQUIREMENTS; UNCERTAINTY OF ADDITIONAL FUNDING
The Company has incurred negative cash flows from operations in each year since
its inception. The Company expects that the funding requirements for its
operating activities will increase substantially in the future due to continued
research and development activities (including preclinical studies and clinical
trials), the development of manufacturing capabilities and the development of
marketing and distribution capabilities. The Company anticipates that its
capital resources are adequate to satisfy its capital requirements for
approximately the next 21 months at the current level of operations. However,
this is a forward-looking statement, and no assurance can be given that there
will be no change that would consume available resources significantly before
such time. The Company's future capital requirements will depend on many
factors, including continued scientific progress in its research, drug discovery
and development programs, the magnitude of these programs, progress with
preclinical studies and clinical trials, prosecuting and enforcing patent
claims, competing technological and market developments, changes in existing
collaborative research or development relationships, the ability of the Company
to establish additional collaborative relationships, and the cost of
manufacturing scale-up and effective marketing activities and arrangements. The
Company anticipates, based on its current business plan, that it will be
necessary to raise additional funds in 2000 or earlier. Additional funds, if
any, may possibly be raised through financing arrangements or collaborative
relationships and/or the issuance of preferred or common stock or convertible
securities, on terms and prices significantly more favorable than those of the
currently outstanding Common Stock,
11
<PAGE>
which could have the effect of diluting or adversely affecting the holdings or
rights of existing stockholders of the Company. In addition, collaborative
arrangements may require the Company to transfer certain material rights to such
corporate partners. If adequate funds are not available, the Company will be
required to delay, scale back or eliminate one or more of its research, drug
discovery or development programs or attempt to obtain funds through
arrangements with collaborative partners or others that may require the Company
to relinquish some or all of its rights to certain of its intellectual property,
product candidates or products. No assurance can be given that additional
financing will be available to the Company on acceptable terms, if at all.
COMPETITION
The Company is engaged in the pharmaceutical industry, which is characterized by
extensive research efforts, rapid technological progress and intense
competition. There are many public and private companies, including well-known
pharmaceutical companies, chemical companies, specialized biotechnology
companies and academic institutions, engaged in developing synthetic
pharmaceuticals and biotechnological products for human therapeutic applications
that represent significant competition to the Company. Existing products and
therapies and improvements thereto will compete directly with products the
Company is seeking to develop and market, and the Company is aware that other
companies or institutions are pursuing development of new drugs and technologies
directly targeted at applications for which the Company is developing its drug
compounds. Many of the Company's competitors have substantially greater
financial and technical resources and production and marketing capabilities and
experience than does the Company. The Company has granted Novartis a worldwide
exclusive license to several compounds in the Company's sixth group of PNP
inhibitors. Such arrangement with Novartis does not include BCX-34 or most of
the Company's other compounds. No assurance can be given that Novartis will or
will not develop compounds under such arrangements, will be able to obtain FDA
approval for any licensed compounds, that any such licensed compounds if so
approved will be able to be commercialized successfully, or that the Company
will realize any revenues pursuant to such arrangements. If commercialized,
these compounds could compete directly against other compounds, including
BCX-34, being developed by the Company.
Many of the Company's competitors have significantly greater experience in
conducting preclinical studies and clinical trials of new pharmaceutical
compounds and in obtaining FDA and other regulatory approvals for health care
products. Accordingly, BioCryst's competitors may succeed in obtaining approvals
for their drug candidates more rapidly than the Company and in developing
products that are safer or more effective or less costly than any that may be
developed by the Company and may also be more successful than the Company in the
production and marketing of such products. Many of the Company's competitors
also have current GMP facilities and significantly greater experience in
implementing GMP or in obtaining and maintaining the requisite regulatory
standards for manufacturing. Moreover, other technologies are, or may in the
future become, the basis for competitive products. Competition may increase
further as a result of the potential advances from structure-based drug design
and greater availability of capital for investment in this field. There can be
no assurance that the Company's competitors will not succeed in developing
technologies and products that are more effective than any being developed by
the Company or that would render the Company's technology and product candidates
obsolete or noncompetitive.
UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY RIGHTS
The Company's success will depend in part on its ability to obtain and enforce
patent protection for its products, preserve its trade secrets, and operate
without infringing on the proprietary rights of third parties, both in the
United States and in other countries. In the absence of patent protection, the
Company's business may be adversely affected by competitors who develop
substantially equivalent technology. Because of the substantial length of time
and expense associated with bringing new products through development and
regulatory approval to the marketplace, the pharmaceutical and biotechnology
industries place considerable importance on obtaining and maintaining patent and
trade secret protection for new technologies, products and processes. To date,
the Company has been issued seven United States patents related to its PNP
inhibitor compounds. One of these compounds is under a patent issued to the
Warner-Lambert Company ("Warner-Lambert") and the Company may require a license
from Warner-Lambert to market a product containing this compound. The Company
has the right of first refusal to negotiate a license from Warner-Lambert for
that compound, however, there can be no assurance that such a license would be
available or obtainable on terms acceptable to the Company. A patent has also
been issued to BioCryst by the U.S.
12
<PAGE>
Patent and Trademark Office ("PTO") on a new process to prepare BCX-34 and other
PNP inhibitors and an additional patent application has been filed for another
new process to prepare BCX-34 and other PNP inhibitors. In addition, two patent
applications and two provisional patents have been filed with the PTO relating
to inhibitors of influenza neuraminidase. Also, two provisional United States
patent applications have been filed with the PTO on complement inhibitors. The
Company has filed certain corresponding foreign patent applications and intends
to file additional foreign patent applications and additional United States
patent applications, as appropriate. There can be no assurance that patents will
be issued from such applications, that the Company will develop additional
products that are patentable or that present or future patents will provide
sufficient protection to the Company's present or future technologies, products
and processes. In addition, there can be no assurance that others will not
independently develop substantially equivalent proprietary information, design
around the Company's patents or obtain access to the Company's know-how or that
others will not successfully challenge the validity of the Company's patents or
be issued patents which may prevent the sale of one or more of the Company's
product candidates, or require licensing and the payment of significant fees or
royalties by the Company to third parties in order to enable the Company to
conduct its business. Legal standards relating to the scope of claims and the
validity of patents in the fields in which the Company is pursuing research and
development are still evolving, are highly uncertain and involve complex legal
and factual issues. No assurance can be given as to the degree of protection or
competitive advantage any patents issued to the Company will afford, the
validity of any such patents or the Company's ability to avoid violating or
infringing any patents issued to others. Further, there can be no guarantee that
any patents issued to or licensed by the Company will not be infringed by the
products of others. Litigation and other proceedings involving the defense and
prosecution of patent claims can be expensive and time consuming, even in those
instances in which the outcome is favorable to the Company, and can result in
the diversion of resources from the Company's other activities. An adverse
outcome could subject the Company to significant liabilities to third parties,
require the Company to obtain licenses from third parties or require the Company
to cease any related research and development activities or sales.
The Company's success is also dependent upon the skills, knowledge and
experience (none of which is patentable) of its scientific and technical
personnel. To help protect its rights, the Company requires all employees,
consultants, advisors and collaborators to enter into confidentiality agreements
which prohibit the disclosure of confidential information to anyone outside the
Company and requires disclosure and assignment to the Company of their ideas,
developments, discoveries and inventions. There can be no assurance, however,
that these agreements will provide adequate protection for the Company's trade
secrets, know-how or other proprietary information in the event of any
unauthorized use or disclosure or the lawful development by others of such
information.
The Company's management and scientific personnel have been recruited primarily
from other pharmaceutical companies and academic institutions. In many cases,
these individuals are continuing research in the same areas with which they were
involved prior to joining BioCryst and may be restricted by agreement from
disclosing to the Company trade secrets they learned elsewhere. As a result, the
Company could be subject to allegations of violation of such agreements and
similar claims and litigation regarding such claims could ensue.
DEPENDENCE ON KEY MANAGEMENT AND QUALIFIED PERSONNEL
The Company is highly dependent upon the efforts of its senior management and
scientific team. The loss of the services of one or more members of the senior
management and scientific team could significantly impede the achievement of
development objectives. Although the Company maintains, and is the beneficiary
of, a $2 million key-man insurance policy on the life of Charles E. Bugg, Ph.D.,
Chairman of the Board of Directors and Chief Executive Officer, the Company does
not believe the proceeds would be adequate to compensate for his loss. Due to
the specialized scientific nature of the Company's business, the Company is also
highly dependent upon its ability to attract and retain qualified scientific,
technical and key management personnel. There is intense competition for
qualified personnel in the areas of the Company's activities, and there can be
no assurance that the Company will be able to continue to attract and retain
qualified personnel necessary for the development of its existing business and
its expansion into areas and activities requiring additional expertise, such as
production and marketing. The loss of, or failure to recruit, scientific,
technical and managerial personnel could have a material adverse effect on the
Company. In addition, the Company relies on members of its Scientific Advisory
Board and consultants to assist the Company in formulating its research and
development strategy. All of the members of the Scientific Advisory
13
<PAGE>
Board and all of the Company's consultants are employed by other employers, and
each such member or consultant may have commitments to, or consulting or
advisory contracts with, other entities that may limit their availability to the
Company.
LACK OF MANUFACTURING, MARKETING OR SALES CAPABILITY
The Company has not yet manufactured or marketed any products and currently does
not have the facilities to manufacture its product candidates in commercial
quantities under GMP as prescribed and required by the FDA. To be successful,
the Company's products must be manufactured in commercial quantities under GMP
and at acceptable costs. Although the Company is formulating and packaging under
GMP conditions small amounts of certain drug formulations which are the subject
of preclinical studies and clinical trials, the current facilities of the
Company are not adequate for commercial scale production. Therefore, the Company
will need to develop its own GMP manufacturing facility and/or depend on its
collaborators, licensees or contract manufacturers for the commercial
manufacture of its products. The Company has no experience in such commercial
manufacturing and no assurance can be given that the Company will be able to
make the transition to commercial production successfully or at an acceptable
cost. In addition, no assurance can be given that the Company will be able to
make arrangements with third parties to manufacture its products on acceptable
terms, if at all. The inability of the Company to manufacture or provide for the
manufacture of any products it may develop on a cost-effective basis would have
a material adverse effect on the Company.
The Company has no experience in marketing, distributing or selling
pharmaceutical products and will have to develop a pharmaceutical sales force
and/or rely on its collaborators, licensees or arrangements with others to
provide for the marketing, distribution and sales of any products it may
develop. There can be no assurance that the Company will be able to establish
marketing, distribution and sales capabilities or make arrangements with
collaborators, licensees or others to perform such activities.
UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT AND PRODUCT PRICING
Successful commercialization of any pharmaceutical products the Company may
develop will depend in part upon the availability of reimbursement or funding
from third-party health care payors such as government and private insurance
plans. There can be no assurance that third-party reimbursement or funding will
be available for newly approved pharmaceutical products or will permit price
levels sufficient to realize an appropriate return on the Company's investment
in its pharmaceutical product development. The U.S. Congress is considering a
number of legislative and regulatory reforms that may affect companies engaged
in the health care industry in the United States. Although the Company cannot
predict whether these proposals will be adopted or the effects such proposals
may have on its business, the existence and pendency of such proposals could
have a material adverse effect on the Company in general. In addition, the
Company's ability to commercialize potential pharmaceutical products may be
adversely affected to the extent that such proposals have a material adverse
effect on other companies that are prospective collaborators with respect to any
of the Company's pharmaceutical product candidates.
Third-party payors are continuing their efforts to contain or reduce the cost of
health care through various means. For example, third-party payors are
increasingly challenging the prices charged for medical products and services.
Also, the trend toward managed health care in the United States and the
concurrent growth of organizations, such as health maintenance organizations,
which can control or significantly influence the purchase of health care
services and products, as well as legislative proposals to reform health care or
reduce government insurance programs, may result in lower prices for
pharmaceutical products. The cost containment measures that health care
providers are instituting and the effect of any health care reform could
materially adversely affect the Company's ability to sell its products if
successfully developed and approved.
RISK OF PRODUCT LIABILITY; AVAILABILITY OF INSURANCE
The Company's business may be affected by potential product liability risks
which are inherent in the testing, manufacturing and marketing of pharmaceutical
and other products under development by the Company. There can be no assurance
that product liability claims will not be asserted against the Company, its
collaborators or licensees.
14
<PAGE>
The use of compounds or drug candidates developed by the Company in clinical
trials and the subsequent sale of such products is likely to cause BioCryst to
bear all or a portion of those risks. The Company does not have product
liability insurance but does maintain coverage for clinical trials in the amount
of $6.0 million per occurrence and in the aggregate. No assurance can be given
that such insurance will be adequate to cover claims made with respect to the
clinical trials. There can be no assurance that the Company will be able to
obtain or maintain adequate product liability insurance on acceptable terms or
that such insurance will provide adequate coverage against potential
liabilities. Furthermore, there can be no assurance that any collaborators or
licensees of BioCryst will agree to indemnify the Company, be sufficiently
insured or have a net worth sufficient to satisfy any such product liability
claims.
HAZARDOUS MATERIALS; COMPLIANCE WITH ENVIRONMENTAL REGULATIONS
The Company's research and development involves the controlled use of hazardous
materials, chemicals and various radioactive compounds. Although the Company
believes that its safety procedures for handling and disposing of such materials
comply with the standards prescribed by state and federal regulations, the risk
of accidental contamination or injury from these materials cannot be completely
eliminated. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the resources of
the Company. The Company may incur substantial costs to comply with
environmental regulations if the Company develops manufacturing capacity.
CONTROL BY EXISTING MANAGEMENT AND STOCKHOLDERS; EFFECT OF CERTAIN ANTI-TAKEOVER
CONSIDERATIONS
The Company's directors, executive officers and certain principal stockholders
and their affiliates own beneficially approximately 37.6% of the Common Stock.
Accordingly, such holders, if acting together, may have the ability to exert
significant influence over the election of the Company's Board of Directors and
other matters submitted to the Company's stockholders for approval. The voting
power of these holders may discourage or prevent any proposed takeover of the
Company unless the terms thereof are approved by such holders. Pursuant to the
Company's Composite Certificate of Incorporation (the "Certificate of
Incorporation"), shares of Preferred Stock may be issued by the Company in the
future without stockholder approval and upon such terms as the Board of
Directors may determine. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock could have the effect of discouraging a third party from acquiring a
majority of the outstanding Common Stock of the Company and preventing
stockholders from realizing a premium on their shares. The Company's Certificate
of Incorporation also provides for staggered terms for the members of the Board
of Directors. A staggered Board of Directors and certain provisions of the
Company's by-laws and of Delaware law applicable to the Company could delay or
make more difficult a merger, tender offer or proxy contest involving the
Company.
PRICE VOLATILITY
The securities markets have from time to time experienced significant price and
volume fluctuations that have often been unrelated to the operating performance
of particular companies. In addition, the market prices of the common stock of
many publicly traded emerging pharmaceutical and biopharmaceutical companies
have in the past been, and can in the future be expected to be, especially
volatile. Announcements of technological innovations or new products by the
Company or its competitors, developments or disputes concerning patents or
proprietary rights or collaboration partners, achieving or failing to achieve
development milestones, publicity regarding actual or potential medical results
relating to products under development by the Company or its competitors,
regulatory developments in both U.S. and foreign countries, public concern as to
the safety of pharmaceutical products and economic and other external factors,
as well as period-to-period fluctuations in the Company's financial results, may
have a significant impact on the market price of the Common Stock.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS:
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits:
NUMBER DESCRIPTION
3.1 Composite Certificate of Incorporation of Registrant.
Incorporated by reference to Exhibit 3.1 to the Company's
Form 10-Q for the second quarter ending June 30, 1995
dated August 11, 1995.
3.2 Bylaws of Registrant. Incorporated by reference to
Exhibit 3.1 to the Company's Form 10-Q for the second
quarter ending June 30, 1995 dated August 11, 1995.
4.1 See Exhibits 3.1 and 3.2 for provisions of the Composite
Certificate of Incorporation and Bylaws of the Registrant
defining rights of holders of Common Stock of the
Registrant.
10.1 1991 Stock Option Plan, as amended and restated.
Incorporated by reference to Exhibit 99.1 to the
Company's Form S-8 Registration Statement (Registration
No. 333-30751).
10.2 Form of Notice of Stock Option Grant and Stock Option
Agreement. Incorporated by reference to Exhibit 99.2 and
99.3 to the Company's Form S-8 Registration Statement
(Registration No. 33-95062).
10.3 Warehouse Lease dated January 17, 1992 between
Principal Mutual Life Insurance Company and the
Registrant. Incorporated by reference to Exhibit 10.21
to the Company's Form S-1 Registration Statement
(Registration No. 33-73868).
10.4 Employment Agreement dated December 17, 1996 between the
Registrant and Charles E. Bugg, Ph.D. Incorporated by
reference to Exhibit 10.11 to the Company's Form 10-K for
the year ended December 31, 1996 dated March 28, 1997.
10.5 Employment Agreement dated December 18, 1996 between the
Registrant and J. Claude Bennett. Incorporated by
reference to Exhibit 10.12 to the Company's Form 10-K for
the year ended December 31, 1996 dated March 28, 1997.
10.6# License Agreement dated April 15, 1993 between Ciba-Geigy
Corporation (now merged into Novartis) and the
Registrant. Incorporated by reference to Exhibit 10.40 to
the Company's Form S-1 Registration Statement
(Registration No. 33-73868).
10.7 Employee Stock Purchase Plan. Incorporated by reference
to Exhibit 99.4 to the Company's Form S-8 Registration
Statement (Registration No. 33-95062).
16
<PAGE>
10.8 First Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.21 to the Company's Form 10-K for the year
ending December 31, 1994 dated March 28, 1995.
10.9 Form of Stock Purchase Agreement dated May 1995 between
Registrant and various parties to purchase 1,570,000
shares of common stock. Incorporated by reference to
Exhibit 10.22 to the Company's Form 10-Q for the second
quarter ending June 30, 1995 dated August 11, 1995.
10.10 Form of Registration Rights Agreement dated May 1995
between Registrant and various parties. Incorporated by
reference to Exhibit 10.23 to the Company's Form 10-Q for
the second quarter ending June 30, 1995 dated August 11,
1995.
10.11 Form of Stock Purchase Agreement dated March 22, 1996
among Registrant and certain investors to purchase
1,000,000 shares of common stock. Incorporated by
reference to Exhibit 10.1 to the Company's Form 8-K dated
March 22, 1996.
10.12 Form of Registration Rights Agreement dated March 22,
1996 among Registrant and certain investors. Incorporated
by reference to Exhibit 10.2 to the Company's Form 8-K
dated March 22, 1996.
10.13# License Agreement, dated May 31, 1996, between Registrant
and Torii Pharmaceutical Co., Ltd. ("Torii").
Incorporated by reference to Exhibit 10.1 to the
Company's Form 8-K/A dated May 3, 1996 and filed August
2, 1996.
10.14# Stock Purchase Agreement, dated May 31, 1996, between
Registrant and Torii. Incorporated by reference to
Exhibit 10.2 to the Company's Form 8-K/A dated May 3,
1996 and filed August 2, 1996.
10.15 Second Amendment to Lease Agreement between Registrant
and Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.24 to the Company's Form 10-Q for the first
quarter ending March 31, 1997 dated May 12, 1997.
10.16 Third Amendment to Lease Agreement between Registrant and
Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.24 to the Company's Form 10-Q for the first
quarter ending March 31, 1998 dated April 29, 1998.
10.17 Fourth Amendment to Lease Agreement between Registrant
and Principal Mutual Life Insurance Company, Inc. for
office/warehouse space. Incorporated by reference to
Exhibit 10.22 to the Company's Form 10-Q for the second
quarter ending June 30, 1998 dated April 29, 1998.
10.18# License Agreement dated as of September 14, 1998 between
Registrant and The R.W. Johnson Pharmaceutical Research
Institute and Ortho-McNeil Pharmaceutical, Inc.
Incorporated by reference to Exhibit 10.23 to the
Company's Form 10-Q for the third quarter ending
September 30, 1998 dated November 10, 1998.
10.19 Stock Purchase Agreement dated as of September 14, 1998
between Registrant and Johnson & Johnson Development
Corporation. Incorporated by reference to Exhibit 10.24
to the Company's Form 10-Q for the third quarter ending
September 30, 1998 dated November 10, 1998.
10.20 Stockholder's Agreement dated as of September 14, 1998
between Registrant and Johnson & Johnson Development
Corporation. Incorporated by reference to Exhibit 10.25
to the Company's Form 10-Q for the third quarter ending
September 30, 1998 dated November 10, 1998.
27.1 Financial Data Schedule.
----------
# Confidential treatment granted.
b. Reports on Form 8-K:
None.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BIOCRYST PHARMACEUTICALS, INC.
Date: April 29, 1999 /S/ CHARLES E. BUGG
--------------------------------------------
Charles E. Bugg
Chairman and Chief Executive Officer
Date: April 29, 1999 /S/ RONALD E. GRAY
--------------------------------------------
Ronald E. Gray
Chief Financial Officer and Chief Accounting
Officer
18
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