BioCryst Offers Up To $57.5M in Shares to Fund its New Life in NC

Just three weeks after scuttling plans to merge with a Pennsylvania company and move there, publicly traded Durham biotechnology company BioCryst Pharmaceuticals is selling up to $57.5 million in stock in an underwritten public offering to kick its way into the marketplace from North Carolina.

In early July BioCryst shareholders rejected a January 2018 merger agreement with Idera Pharmaceuticals, in a special vote that left BioCryst in the Triangle rather than moving to Pennsylvania. Key shareholders said the merger undervalued BioCryst’s upside potential.

BioCryst, founded in 1986 in Birmingham, Ala., designs and develops small-molecule drugs that block key enzymes involved in rare diseases. It moved its headquarters to Durham in 2010. That's where it achieved its first product approval in RAPIVAB, a viral neuraminidase inhibitor for treating influenza. The company now has two late-stage compounds in the clinical pipeline:

• BCX7353, a Phase 3 drug for the prophylactic treatment of hereditary angioedema in a capsule formulation with FDA orphan drug designation
• BCX7353, a Phase 2 drug for the acute treatment of hereditary angioedema in a liquid formulation

In response to the failed merger, Robert Ingram, a North Carolinian who is also chairman of the BioCryst board, said, “We are focused on serving the interests of all stockholders in their desire for BioCryst to pursue a standalone strategy and continue our path to treating patients with rare and serious diseases. The board and management are steadfast in our commitment to capitalize on the opportunities in BioCryst’s current portfolio and advance the promising candidates in the company’s pipeline to generate stockholder value.”

J.P. Morgan and Jefferies are acting as joint book-running managers for the latest offering. In a statement announcing this current stock sale, BioCryst said it's selling 9,090,910 shares of its common stock at $5.50 apiece, or an expected $50 million before discounts and commissions. BioCryst said in the news release that it has granted the underwriters a 30-day option to purchase up to an additional 1,363,636 shares of its common stock. The offering is expected to close on or about August 6, 2018, "subject to customary closing conditions."

It said the proceeds will be used “for general corporate purposes, which may include, but are not limited to, funding worldwide development, manufacturing, regulatory and commercial activities for the prophylactic and acute BCX7353 programs, focusing primarily on the United States, European Union and Japan; the advancement of development activities of our fibrodysplasia ossificans progressiva and other preclinical rare disease program; post-approval commitments for RAPIVAB/ALPIVAB; and capital expenditures and general working capital needs.”

Bottom line: another game-changing life science recruit decides North Carolina is a really smart place to call home. And North Carolina welcomes BioCryst with open arms.