BioCryst Pharmaceuticals, Inc. — 2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. The filing also reports fourth-quarter results; this is an annual report, not a standalone quarterly filing. Financial amounts below are in U.S. dollars unless stated otherwise.
Business context and reporting period
BioCryst is a commercial-stage biotechnology company developing oral small-molecule medicines for rare diseases. Its lead product, ORLADEYO (berotralstat), was approved in the U.S. in December 2020 for prevention of hereditary angioedema (HAE) attacks, and U.S. shipments began that month. Japan approved ORLADEYO in January 2021; the EU had issued a positive committee opinion by February 2021, with a final decision expected in the second quarter of 2021. Other programs include BCX9930 for complement-mediated diseases, BCX9250 for FOP, and galidesivir for antiviral and biodefense uses.
Financial performance and liquidity
| Metric | FY 2020 | FY 2019 |
|---|---|---|
| Total revenue | $17.8 million | $48.8 million |
| Operating expenses | $192.6 million | $148.3 million |
| Loss from operations | $174.8 million | $99.5 million |
| Net loss | $182.8 million | $108.9 million |
| Basic and diluted loss per share | $1.09 | $0.94 |
| Net cash used in operating activities | $137.2 million | $89.6 million |
Revenue fell about 64%, primarily because 2019 included $20.1 million recognized from the Torii upfront payment and $13.9 million of RAPIVAB sales to the U.S. government; neither recurred in 2020. FY2020 revenue included $3.3 million in product sales, $3.4 million in royalties, and $9.2 million in government research and development reimbursements. Cost of products sold was $1.6 million. A conventional gross-margin measure is not presented, and total revenue includes collaboration reimbursements and royalties.
R&D expense increased to $123.0 million from $107.1 million, led by complement-disease and galidesivir programs and other research and development activity. Selling, general and administrative expense rose to $67.9 million from $37.1 million, reflecting ORLADEYO launch and commercial infrastructure spending.
At December 31, 2020, cash and cash equivalents were $272.1 million and investments were $28.2 million; working capital was $218.1 million. Total assets were $334.7 million and stockholders’ equity was negative $19.3 million. The company reported $125.0 million principal outstanding under its new secured term loan, carried at $119.7 million net of financing costs, and a $124.7 million royalty financing obligation. The $30.0 million PhaRMA non-recourse notes remained in default after their December 2020 maturity; $20.6 million of accrued unpaid interest was also due. The balance sheet reports total interest payable of $21.7 million.
Financing in 2020 included $108.1 million net proceeds from an equity and pre-funded warrant offering, $125.0 million cash from an ORLADEYO royalty sale, and a $125.0 million Term A loan. The loan proceeds partly repaid approximately $43.3 million of MidCap debt. Net cash provided by financing activities was $302.7 million. The company had $274.3 million of cash, cash equivalents and restricted cash at year-end.
Material changes versus comparable periods
FY2020 net loss increased by $73.9 million year over year, while operating cash use increased by $47.6 million. The Q4 comparison was especially affected by prior-year one-time revenue: fourth-quarter 2020 revenue was $4.0 million and net loss was $60.5 million, versus $39.7 million revenue and $2.6 million net loss in Q4 2019. Fourth-quarter loss per share was $0.34 versus $0.02.
BioCryst launched ORLADEYO in the U.S. and expanded commercial operations, while R&D spending shifted toward BCX9930 and galidesivir. The company’s year-end cash position increased substantially following the 2020 equity raise, royalty monetization, and new loan, but the transactions added royalty obligations and secured debt. Stockholders’ equity moved from positive $38.3 million in 2019 to a deficit of $19.3 million in 2020.
Outlook, risks, contingencies, and unusual items
- Outlook: Management estimated that available resources, including the option to access another $75 million under the credit agreement, could fund operations into 2023. BioCryst expected 2021 expenses to exceed 2021 revenue and did not provide specific 2021 revenue or operating guidance.
- ORLADEYO: Management estimated potential global peak annual sales above $500 million; this is an estimate, not formal guidance. RPI receives tiered sales-based royalties in specified territories and revenue shares in other markets; it also receives 1% of any global BCX9930 sales.
- Debt and liquidity: The Athyrium credit agreement matures December 7, 2025, bears variable interest, is secured by substantially all company assets, and includes minimum-liquidity and other covenants. Up to $75 million of additional loans is conditional on revenue and other requirements. The PhaRMA notes’ holders may pursue remedies against collateral and the company’s interest in Royalty Sub; management said it did not currently expect a significant effect on future results or cash flows, but could not assure that outcome.
- Arbitration and unusual items: A tribunal terminated the Seqirus peramivir agreement, restored rights to BioCryst, and awarded $5.0 million plus interest for an unpaid milestone. The company recorded an $8.9 million settlement gain in other income and $5.0 million of related legal and other expenses in SG&A. Repayment of the MidCap facility resulted in a $2.0 million debt-extinguishment loss.
- Pipeline and COVID-19: The company reported encouraging early safety and biomarker findings for BCX9930 and phase 1 tolerability findings for BCX9250; both remain investigational. Galidesivir was generally well tolerated in a COVID-19 trial, but no efficacy benefit was observed; management expected government support to focus on biodefense rather than COVID-19. COVID-19 had slowed startup of BCX9930 trial cohorts and could disrupt trials, supply, regulatory review, commercialization, or access to capital.
- Other material risks: BioCryst has a history of losses and negative operating cash flow, depends on third parties for manufacturing and distribution, faces intense competition and reimbursement uncertainty, and relies on government contracts for galidesivir funding. It also cited intellectual-property, regulatory, product-liability, and commercialization risks. Management and the auditor reported effective internal control over financial reporting; the financial statements received an unqualified audit opinion.
Key facts for investors to verify
- ORLADEYO prescriptions, net sales, payer coverage, launch costs, and progress toward European and Japanese commercialization.
- Actual cash burn and runway relative to management’s estimate of funding into 2023, including whether conditional credit tranches become available.
- Credit agreement interest, covenants, repayment terms, and the status and potential consequences of the defaulted PhaRMA notes.
- RPI royalty terms, the carrying value and effective-interest assumptions for the royalty financing obligation, and the resulting impact on future product economics.
- Further clinical data, development plans, regulatory milestones, and funding for BCX9930, BCX9250, and galidesivir.
- Any changes to government contract awards, RAPIVAB deliveries, manufacturing capacity, or third-party supply and distribution arrangements.