“We just completed our end of Phase 2 meeting with the FDA regarding our gout program. The agency provided clear and informative guidance regarding the path to approval for BCX4208, and we are now incorporating this advice into the Phase 3 plan. Our goal is to conclude our partnering process during 2012 to enable Phase 3 trials to start as soon as possible,” said Jon P. Stonehouse, President & Chief Executive Officer of BioCryst. “We are currently completing nonclinical safety studies for our preclinical drug candidates to treat hepatitis C and hereditary angioedema, and both programs remain on track to move into clinical trials before the end of this year. BioCryst continues to effectively execute its plan to advance four development programs, each representing value creation opportunities.”
First Quarter Financial Results
For the three months ended March 31, 2012, revenues increased to $12.2 million from $5.4 million in last year’s quarter. The large increase in revenue for the quarter relates to the recognition of $7.8 million of forodesine-related revenue. The Company completed the transfer of the forodesine IND and other technical aspects of the program anticipated in the November 2011 restructuring of the license agreement between BioCryst and Mundipharma. Upon completion of this regulatory and technical transfer in the first quarter of 2012, all previously deferred revenue and expense associated with the Mundipharma relationship has been recognized. This transfer did not have any impact on the Company’s cash balance.
Research and development expenses for the quarter increased to $15.4 million from $13.4 million in the first quarter of 2011, primarily due the recognition of $1.9 million of deferred expenses associated with forodesine and the Mundipharma agreement. Higher development costs associated with the preclinical and peramivir development programs were offset by lower development costs associated with the BCX4208 gout program.
General and administrative expenses for the quarter decreased to $1.8 million compared to $3.5 million in last year’s quarter. The decrease of $1.7 million from 2011 is primarily the result of costs incurred in 2011 relating to the transition of the Company’s headquarters to North Carolina, as well as reductions in other administrative expenses during 2012.
Interest expense related to the non-recourse notes increased to $1.2 million in the first quarter of 2012 compared to $0.3 million in the first quarter of 2011, due to recognizing a full quarter of interest expense in 2012 compared a partial month in 2011. In addition, a small mark-to-market gain on our foreign currency hedge was recognized in the first quarter of 2012, compared to a mark-to-market loss of $1.3 million in the same quarter in the prior year, resulting from changes in the U.S. dollar/Japanese yen exchange rate.
The net loss for the first quarter 2012 was $6.1 million, or $0.13 per share, compared to a net loss of $13.0 million, or $0.29 per share, for the first quarter 2011.
Cash, cash equivalents and investments totaled $57.3 million at March 31, 2012, in line with $57.7 million at December 31, 2011. Net operating cash use for the first quarter of 2012 was $11.7 million. Operating cash use excludes $11.7 million in proceeds from sales of common stock through the Company’s at-the-market offering (ATM) during the first quarter 2012, as well as collateral receipts/payments under the foreign currency hedge agreement.
Clinical Development Update & Outlook
• In April, BioCryst held an End of Phase 2 meeting with the FDA regarding BCX4208, which included discussions around its Phase 3 program. The proposed Phase 3 trial plan anticipates enrollment of approximately 1,800 patients and 12 months of study drug exposure; BCX4208 administration as add-on treatment to the approved xanthine oxidase (XO) inhibitors, allopurinol or febuxostat; study population of gout patients who are not adequately responding to a XO inhibitor alone; and a primary efficacy endpoint at six months of the proportion of patients with a serum uric acid (sUA) level that is <6.0 mg/dL. In addition, the Company has also initiated the Scientific Advice Process with the EMA and expects feedback in the third quarter of 2012.
• During the third quarter of 2012, BioCryst expects to complete the extension phase through 52-weeks of its randomized Phase 2b clinical trial of BCX4208 added to allopurinol in patients with gout who had failed to reach the sUA goal of <6 mg/dL on allopurinol alone. BioCryst also expects to complete its Phase 2 BCX4208 clinical trial in patients with moderate renal impairment during the third quarter. The Company has closed enrollment for this study at 20 patients.
• The company is completing Good Laboratory Practices (GLP) nonclinical safety studies of BCX5191 for hepatitis C and BCX4161 for hereditary angioedema. Both programs remain on track for the initiation of first-in-human trials before the end of the 2012. The Company has started Phase 1 planning for each drug candidate.
• BioCryst continues to enroll patients in the ongoing Phase 3 efficacy clinical trial of the influenza antiviral i.v. peramivir. The Company plans to provide an update following the planned interim analysis, which is expected after the conclusion of the 2012 Southern Hemisphere flu season.
Financial Outlook for 2012
Based upon current trends and assumptions, as well as the Company’s planned operations, BioCryst continues to expect net operating cash use to be in the range of $32 to $38 million, and its total operating expenses to be in the range of $57 to $69 million. The Company’s operating cash forecast excludes any potential cash inflows from out-licensing or other sources. BioCryst’s 2012 financial results will be heavily dependent on peramivir-related operating expenses, which are largely a function of the rate of enrollment in the Company’s ongoing Phase 3 clinical trial, which in turn is dependent on the prevalence and severity of influenza in those geographies where BioCryst has clinical sites.