BioCryst Pharmaceuticals down after disappointing flu trial
Shares of BioCryst Pharmaceuticals (Nasdaq: BCRX) are plunging today after the biotechnology company reported after Wednesday’s close that its Phase II trial of peramivir for the treatment of the flu did not significantly improve flu ailments when compared with a placebo.
Caris & Company is downgrading the small-cap company to a rating of “average” from “above average” based on the negative Phase II results.
“We believe development risk has increased,” Caris & Company analyst Douglas Chow wrote in a research note today.
On account of the disappointing trial, Chow is lowering his target price to $9.50 from $13. He also lowered his estimated probability for success in BioCryst’s Phase III trial to 40% from 80%. The company intends to begin Phase III trials in the second half of this year.
While the company is suffering a setback from its worse than expected Phase II results, Cow says he thinks value creation still lies ahead.
“With clinical development of peramivir funded by a $102.6 million contract from the U.S. Department of Health and Human Services, and BCX-4208 funded by Roche, steady advancement of clinical programs and a moderate cash burn rate could create value for shareholders in the next 12 months,” Chow wrote.
Chow also noted that in the event of an actual pandemic today, BioCryst would be able to meet government needs.
Going forward, there could be a couple of catalysts for the stock. According to Chow, BioCryst could initiate a trial for Fodosine cutaneous T-cell lymphoma during the third quarter of 2007. In the fourth quarter, BioCryst plans to start the Phase III trial with peramivir in influenza. Also in the last quarter of the year, Chow said he expects BioCryst could announce additional clinical programs for Fodosine.
Shares of BioCryst (BCRX) plummeted $4.10, or 34.80%, to $7.68 in midday trading.
