BioCryst Pharmaceuticals, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; unaudited. BioCryst is a commercial-stage biotechnology company focused on rare diseases. Its marketed products include ORLADEYO for hereditary angioedema (HAE) prevention and RAPIVAB/peramivir for influenza.
Key financial results
Amounts are in millions of dollars, except per-share data.
| Metric | Q1 2022 | Q1 2021 | Change / context |
|---|---|---|---|
| Total revenue | $49.9 | $19.1 | Up $30.9, primarily from ORLADEYO |
| ORLADEYO net sales | $49.4 | $10.9 | Up $38.4 |
| Net loss | $(74.2) | $(64.3) | Loss increased $9.9 |
| Loss from operations | $(50.0) | $(51.4) | Operating loss narrowed $1.4 |
| Research and development | $65.4 | $42.4 | Higher investment, especially Factor D/BCX9930 |
| Selling, general and administrative | $34.3 | $22.1 | Higher commercial and international launch spending |
| Interest expense | $23.8 | $12.9 | Increase mainly from royalty financing obligations |
| Net loss per share, basic and diluted | $(0.40) | $(0.36) | — |
| Net cash used in operating activities | $(77.8) | $(61.0) | Cash used increased $16.8 |
Financial position and liquidity
- At March 31, 2022, cash and cash equivalents were $395.5 million, with $48.0 million of current investments; restricted cash was $3.4 million. Cash, cash equivalents and restricted cash totaled $398.9 million.
- Working capital was $430.7 million, down from $462.4 million at December 31, 2021. Total assets were $527.7 million and stockholders’ deficit was $164.2 million.
- Secured term-loan carrying value was $140.2 million; the principal balance including capitalized PIK interest was $146.4 million. The loan bears interest at 12.17% as of quarter-end and matures December 7, 2025. The credit facility had another $75 million available, subject to conditions.
- Royalty financing obligations were $464.2 million. These obligations generate substantial non-cash interest and entitle RPI and OMERS to specified royalties or revenue shares on ORLADEYO and certain Factor D products.
- Management stated that available resources, expected revenue and the additional credit-facility availability should fund operations for at least 12 months. The company nevertheless expects 2022 expenses to exceed revenue, continued operating losses and negative cash flows.
Material changes and operating developments
- Total revenue increased approximately 162% year over year. ORLADEYO net sales were the principal driver. Higher ORLADEYO and peramivir royalty revenue partly offset lower peramivir partner product sales and lower government contract revenue.
- R&D expense increased about 54% year over year, including Factor D program costs of $42.0 million versus $26.0 million. SG&A rose about 55%, reflecting support for ORLADEYO commercialization and international operations.
- Interest expense rose by $10.9 million, including $19.6 million of non-cash interest expense associated with royalty financing obligations in Q1 2022.
- Operating cash use exceeded net loss partly because of working-capital movements, including a $22.9 million decrease from accounts payable and accrued expenses. Cash and cash equivalents fell from $504.4 million at year-end 2021; the company also purchased $38.1 million of investments during the quarter.
Guidance, commentary and risks
- Management expected full-year 2022 net ORLADEYO revenue of at least $250 million, citing launch performance and anticipated continued growth in new-patient demand. It also described a potential global peak of $1 billion in annual net ORLADEYO revenue; this is an expectation, not a guarantee.
- The previously stated 2022 operating-expense range was $440–$480 million, excluding non-cash stock compensation. Management said it would update the outlook after investigating BCX9930: expenses could be at the lower end if enrollment resumed, or lower if the program were discontinued.
- After quarter-end, BioCryst voluntarily paused new enrollment in BCX9930 trials on April 8 while investigating elevated serum creatinine in some patients. The FDA subsequently placed the program on partial clinical hold; existing patients meeting stated conditions could continue treatment. Management had not determined whether enrollment would resume or the trials would be discontinued.
- After quarter-end, the European Medicines Agency granted BCX9250 access to its PRIME scheme, intended to provide enhanced development support for promising medicines addressing unmet needs.
- Key risks include ongoing losses and potential future financing needs; clinical, regulatory and commercialization uncertainty; concentration in a single U.S. specialty pharmacy and reliance on third-party manufacturers; dependence on government contracts for some program funding; debt covenants and variable-rate borrowing; and royalty-sharing obligations that may limit future product economics. The company reported compliance with credit-agreement covenants at March 31, 2022.
- Management reported no material direct impact from COVID-19 on financial condition, results or liquidity to date, while noting potential disruption to operations, trials, suppliers and markets. Disclosure controls and procedures were assessed as effective at quarter-end.
Important facts for investors to verify
- ORLADEYO sales trajectory, patient demand and retention, reimbursement, and progress toward the $250 million 2022 revenue target.
- BCX9930 investigation findings, regulatory requirements and any decision on resuming or ending enrollment.
- Updated 2022 operating-expense outlook and the effect of BCX9930 program decisions on cash use.
- Cash runway under actual operating performance, access to the remaining $75 million credit-facility tranches, and compliance with associated conditions and covenants.
- Future interest expense and royalty payments under the RPI and OMERS arrangements, including the resulting impact on cash flows and product economics.