BioCryst Pharmaceuticals, Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. BioCryst is a commercial-stage biotechnology company focused on oral medicines for rare diseases. Its marketed products include ORLADEYO for hereditary angioedema (HAE) prevention and peramivir products for influenza.
Financial performance and liquidity
Amounts below are in millions of dollars, except per-share data.
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | $82.5 | $65.5 | $151.3 | $115.5 |
| Operating loss | $(20.7) | $(34.7) | $(49.1) | $(84.7) |
| Net loss | $(75.3) | $(58.9) | $(128.7) | $(133.1) |
| Basic and diluted loss per share | $(0.40) | $(0.32) | $(0.68) | $(0.72) |
- ORLADEYO revenue, including royalties, was $81.0 million in Q2, up from $65.2 million; U.S. revenue was $72.8 million and non-U.S. revenue $8.2 million. For the first half, ORLADEYO revenue was $149.4 million, up from $114.9 million.
- Q2 research and development expense fell to $51.2 million from $62.0 million, mainly following discontinuation of BCX9930 and BCX9250. Selling, general and administrative expense rose to $51.0 million from $38.0 million, reflecting commercial-team and international expansion. Six-month R&D was $99.6 million versus $127.4 million; SG&A was $98.9 million versus $72.3 million.
- Q2 operating loss improved year over year, but net loss widened due largely to a $29.0 million one-time loss on extinguishment of debt. The company also reported higher interest expense.
- Six-month operating cash used was $66.3 million, versus $105.6 million in 2022. Investing activities used $126.1 million and financing activities provided $34.4 million. Cash, cash equivalents and restricted cash totaled $147.8 million at period-end.
- At June 30, cash and cash equivalents were $146.2 million, investments were $267.9 million, and net working capital was $417.6 million. Total assets were $529.9 million; stockholders’ deficit was $388.7 million.
- Balance-sheet secured term loans were $293.2 million and royalty financing obligations were $526.1 million. The Pharmakon loan had $300.0 million of initial principal; after a $3.8 million in-kind interest payment, borrowings totaled $303.8 million before deferred financing costs.
Material changes, outlook and risks
- In April 2023, BioCryst refinanced Athyrium debt with a $300 million Pharmakon tranche, using proceeds to repay approximately $241.8 million of Athyrium principal and accrued interest and to pay related costs. Pharmakon offers three optional additional $50 million tranches through September 30, 2024; the loan matures April 17, 2028. Interest is variable-rate and the agreement imposes restrictive covenants. The company reported covenant compliance at June 30.
- Management believes available resources are sufficient to fund operations for at least 12 months, but expects 2023 expenses to exceed revenue and anticipates continued operating losses and negative cash flows until revenue is sufficient to support operations. No specific near-term revenue or earnings guidance is provided.
- Management estimates a potential global peak annual ORLADEYO market of $1 billion, with 70%–80% of peak revenue expected from the U.S.; this is an expectation, not a guarantee or formal financial forecast. The filing says paid U.S. patients increased in Q2 as certain patients transitioned from free product to reimbursed treatment.
- BioCryst announced that BCX10013 dose-ranging trial sites were opening, with enrollment expected by year-end in countries without other approved therapies; the filing also cites a planned higher-dose healthy-volunteer cohort. Development remains subject to clinical and regulatory uncertainty.
- Payments to OMERS under the ORLADEYO royalty monetization are scheduled to begin in Q4 2023. Royalty financing obligations carry significant imputed interest and depend on forecasts of future product sales.
- Key risks include continued losses and possible need for additional capital; dependence on ORLADEYO’s commercial performance; variable-rate debt and lender covenants; reliance on a single U.S. specialty pharmacy and limited-source manufacturers; clinical, regulatory, reimbursement and competition risks; and exposure to foreign exchange, cybersecurity and broader economic disruptions.
- The filing also describes continuing events of default under the legacy PhaRMA Notes, whose maturity passed in 2020. The notes are described as non-recourse, but holders may pursue remedies against collateral and the company’s equity interest in Royalty Sub.
Investor verification points
- Track ORLADEYO paid-patient growth, retention, free-drug conversions, reimbursement, and U.S. versus international sales.
- Review operating cash use and liquidity against management’s 12-month funding assessment and anticipated 2023 losses.
- Check Pharmakon variable interest costs, covenant compliance, optional tranche decisions, and debt repayment terms.
- Assess royalty obligations to RPI and OMERS, including OMERS payments beginning in October 2023 and their effect on product economics.
- Monitor BCX10013 trial enrollment, safety findings and development timing, as well as manufacturing and single-distributor concentration.
- Confirm the status and potential consequences of the PhaRMA Notes default and any resulting claims or enforcement actions.