BioCryst Pharmaceuticals, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Financial statement amounts are in U.S. dollars; amounts below are generally shown in millions. BioCryst is a commercial-stage biotechnology company focused on oral medicines for rare diseases.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Total revenue | $19.1 million | $4.8 million |
| Product sales, net | $17.9 million | $0.2 million |
| Operating expenses | $70.4 million | $45.8 million |
| Operating loss | $51.4 million | $41.0 million loss |
| Net loss | $64.3 million | $37.6 million loss |
| Basic and diluted loss per share | $0.36 | $0.24 |
| Cash used in operating activities | $61.0 million | $23.3 million |
- Revenue included $10.9 million of ORLADEYO sales, $6.8 million of peramivir sales, and $2.1 million of collaborative and other R&D revenue. Royalty revenue was negative $0.9 million, compared with $1.9 million in Q1 2020.
- R&D expense rose to $42.4 million from $29.9 million, chiefly due to BCX9930 investment. BCX9930 program expense was $26.0 million, versus $7.6 million; berotralstat expense fell to $7.9 million from $15.5 million.
- SG&A increased to $22.1 million from $15.9 million, reflecting ORLADEYO launch and international expansion. Cost of product sales was $5.9 million, related to peramivir sales; no cost of product sales was reported in Q1 2020. The filing does not provide a directly comparable blended product margin.
- Interest expense rose to $12.9 million from $3.0 million, mainly reflecting the RPI royalty financing and Athyrium term loan. Q1 2021 included $7.5 million of non-cash interest on the royalty financing obligation.
- At March 31, cash and cash equivalents were $226.9 million, investments $13.5 million, and restricted cash $4.0 million. Net working capital was $172.6 million, down from $218.1 million at year-end 2020. Cash, cash equivalents, and restricted cash declined $43.4 million during the quarter.
- Total assets were $284.4 million, total current liabilities $101.2 million, and stockholders’ equity was negative $75.0 million. The company reported a $64.3 million accumulated quarterly loss.
- Balance-sheet debt and financing obligations included $123.0 million of secured term loan carrying value, $131.3 million of royalty financing obligation, and $30.0 million of current non-recourse notes payable. Gross Athyrium borrowings, including capitalized PIK interest, were $128.5 million.
Material changes and business developments
- ORLADEYO, approved in the U.S. in December 2020, generated its first full quarter of commercial sales. The U.S. launch is conducted through a single specialty pharmacy.
- Peramivir product revenue increased by $6.6 million from Q1 2020. The royalty revenue decline was attributed to product replacement under Green Cross’s supply arrangement with the Korean government.
- In March 2021, BioCryst reported interim BCX9930 results in 16 PNH patients: mean hemoglobin increases of 3.3 g/dL in patients with inadequate C5-inhibitor response and 3.5 g/dL in treatment-naïve patients. The company reported that the drug was generally well tolerated, with no drug-related serious adverse events. These are interim trial findings, not proof of pivotal-trial success.
- After quarter-end, Japan’s NHI price-list approval triggered a $15 million Torii milestone, expected to be recorded as revenue in Q2 2021; Torii launched ORLADEYO in Japan on April 23. The European Commission approved ORLADEYO on April 30, and BioCryst expected a German launch in Q2 2021.
- After quarter-end, the FDA expanded RAPIVAB’s indicated patient population to include patients six months and older.
Outlook, risks, and unusual items
- Management provided no specific revenue or operating guidance during the ORLADEYO launch period. It expects 2021 expenses to exceed 2021 revenue and expects continuing operating losses and negative operating cash flow until revenue supports operations.
- Management believes available financial resources, including the option to access an additional $75 million under the credit facility, are sufficient to fund operations into 2023. This estimate depends on revenue, expenses, product commercialization, development progress, and access to the additional loan tranches.
- The $200 million Athyrium facility included a $125 million initial loan and conditional additional tranches of $25 million and $50 million. The loan matures in December 2025, bears a variable rate, and is secured by substantially all company assets. BioCryst reported compliance with its credit covenants at quarter-end.
- The ORLADEYO royalty sale provided $125 million in 2020 but requires tiered payments to RPI on specified ORLADEYO sales and a 1% royalty on global BCX9930 sales. The financing obligation’s effective interest rate was approximately 24% at March 31, 2021.
- The PhaRMA Notes remained outstanding and in default after their December 2020 maturity: $30 million principal and $22.2 million accrued interest were disclosed at quarter-end. The notes are obligations of the subsidiary Royalty Sub and are described as non-recourse to BioCryst, but noteholders may pursue remedies against collateral, including the Royalty Sub equity interest and related royalty rights.
- Key risks include continued losses and potential need for capital, uncertain ORLADEYO uptake and reimbursement, clinical and regulatory uncertainty for pipeline assets, reliance on single-source manufacturers and distributors, dependence on government contracts for galidesivir and RAPIVAB-related revenue, debt covenants and interest costs, and potential COVID-19-related disruption. Management said COVID-19 had not materially affected financial condition, operations, or liquidity to date, while noting continuing uncertainty.
Investor facts to verify
- Whether ORLADEYO prescriptions, patient retention, reimbursement, and international launches support the company’s revenue and cash-runway assumptions.
- Whether the $15 million Torii milestone was recognized in Q2 2021 and how Japan and European commercialization contribute thereafter.
- BCX9930’s subsequent pivotal-trial design, enrollment, safety, efficacy, timing, and funding requirements.
- Remaining government funding and contract options for galidesivir, and timing of the expected RAPIVAB procurement delivery.
- Liquidity, cash burn, access conditions for Athyrium’s remaining $75 million, debt-covenant compliance, and the status or consequences of the defaulted PhaRMA Notes.
- Future royalty obligations to RPI and changes in the estimated royalty-financing liability and related non-cash interest expense.