On February 23, 2016 BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) reported financial results for the fourth quarter and full year ended December 31, 2015(Press release, BioCryst Pharmaceuticals, FEB 23, 2016, View Source [SID:1234509139]).

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"In 2015, we gained clarity on both of our HAE drug candidates and brought in additional capital by out-licensing RAPIVAB. Our efforts are now focused on completing the bioavailability study of a solid dosage form of avoralstat and completing the APeX-1 clinical trial of BCX7353," said Jon P. Stonehouse, President & Chief Executive Officer. "We ended 2015 with a balance sheet that enables us to achieve these two near-term data events without the need to raise capital. These two programs give us two shots at achieving our goal of developing a highly effective, conveniently dosed, oral drug candidate for the prophylactic treatment of HAE patients."

Fourth Quarter Financial Results

For the three months ended December 31, 2015, total revenues decreased to $4.6 million from $5.4 million in the fourth quarter of 2014. The decrease resulted primarily from lower 2015 RAPIVAB royalty revenue, as well as lower collaborative revenue associated with BCX4430 development under contracts with the National Institute of Allergy and Infectious Diseases (NIAID) and the Biomedical Advanced Research and Development Authority (BARDA).

Research and Development (R&D) expenses for the fourth quarter 2015 of $19.0 million were consistent with the $18.5 million incurred in the fourth quarter 2014. R&D expense in the fourth quarter 2015 was more heavily concentrated in the Company’s hereditary angioedema (HAE) programs, and to a lesser extent, BCX4430 development costs under the NIAID and BARDA contracts, as compared to R&D expenses in the fourth quarter 2014.

Selling, general and administrative (SG&A) expenses for the fourth quarter 2015 increased to $2.7 million compared to $2.0 million in the fourth quarter 2014, largely due to the initiation of activities in preparation for the future commercialization of the Company’s HAE product candidates.

Interest expense, which is related to non-recourse notes, was $1.3 million for the fourth quarter of both 2015 and 2014. Also, a $229,000 mark-to-market gain on the Company’s foreign currency hedge was recognized in the fourth quarter 2015, compared to a $4.8 million mark-to-market gain in the fourth quarter 2014. These gains result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement.

The net loss for the fourth quarter of 2015 was $18.1 million, or $0.25 per share, compared to a net loss of $11.7 million, or $0.16 per share, for the fourth quarter 2014.

2015 Financial Results

For the year ended December 31, 2015, total revenues increased to $48.3 million from $13.6 million in 2014. The increase in 2015 revenues was primarily due to the recognition of $21.8 million of revenue associated with a $33.7 million upfront payment from the RAPIVAB out-licensing transaction, $6.3 million of RAPIVAB product revenue, and increased collaboration revenue associated with BCX4430 development.

R&D expenses increased to $72.8 million for 2015 from $51.8 million for 2014. This increase was primarily the result of significantly higher HAE development costs and slightly higher RAPIVAB and BCX4430 development costs incurred in 2015, as compared to 2014.

SG&A expenses increased to $13.0 million in 2015 from $7.5 million in 2014, due primarily to increased marketing, medical affairs activities associated with HAE programs, as well as unrestricted grants awarded to the U.S. and international HAE patient advocacy groups.

Interest expense, which is related to non-recourse notes, was $5.2 million in 2015 and $5.0 million in 2014. In addition, a $564,000 mark-to-market loss on the Company’s foreign currency hedge was recognized in 2015, compared to a $5.5 million mark-to-market gain in 2014. These gains result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement. We also realized a currency hedge gain of $1.7 million from the exercise of a U.S. Dollar/Japanese yen currency option.

The 2015 net loss decreased to $43.0 million, or $0.59 per share, compared to a net loss of $45.2 million, or $0.68 per share for 2014.

Cash, cash equivalents and investments totaled $100.9 million at December 31, 2015 and represented a $13.1 million decrease from $114.0 million at December 31, 2014. Net operating cash use for 2015 was $42.2 million, as compared to $33.3 million utilized in 2014.

Clinical Development Update & Outlook

On February 8, 2016, we announced results from OPuS-2 (Oral P rophylaxiS-2), a clinical trial of avoralstat administered three times daily in a liquid-filled soft gel formulation for the prophylactic treatment of HAE attacks. The primary efficacy endpoint was angioedema attack frequency. Treatment with 500 mg and 300 mg of avoralstat three times daily failed to demonstrate a statistically significantly lower mean attack rate versus placebo. Statistically significant improvements in duration of attacks and in the Angioedema Quality of Life total score were observed comparing the 500 mg three times a day avoralstat arm to placebo. Following the analysis of OPuS-2 results, the decision was made to discontinue further development of softgel avoralstat formulation in order to focus development efforts on a novel solid dosage form of avoralstat.

BioCryst expects to report results from a relative bioavailability study testing the novel solid dosage form of avoralstat by mid-year 2016. The primary goal of this study is to achieve meaningfully better drug exposure in a twice daily dosing regimen.

BioCryst expects to report results from the BCX7353 APeX-1 dose ranging study in HAE patients by year end. The design of APeX-1 trial will be described once it is initiated.

Financial Outlook for 2016

Based upon development plans and our awarded government contracts, BioCryst expects its 2016 net operating cash use to be in the range of $55 to $75 million, and its 2016 operating expenses to be in the range of $78 to $98 million. Our operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of the Company’s stock, as well as by the vesting of the Company’s outstanding performance-based stock options.