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BIOCRYST MAY SEEK ACCELERATED APPROVAL OF BCX-34 CUTANEOUS T- CELL LYMPHOMA

Executive Summary

BIOCRYST MAY SEEK ACCELERATED APPROVAL OF BCX-34 CUTANEOUS T- CELL LYMPHOMA therapy following the results of a Phase I/II trial that is expected to have results available in May, the Birmingham, Ala. structure-based drug design R&D firm said. BCX-34, a PNP (purine nucleoside phosphorylase) inhibitor, is the startup firm's lead compound. Biocryst has completed a Phase I/II trial of BCX-34 for psoriasis; the firm expects results from the trial to be available this month. The psoriasis trial, in about 14 patients, and an eight-patient trial for cutaneous T-cell lymphoma were begun in December 1992. The firm filed an IND March 18 for a Phase I trial of the compound for allergic contact dermatitis. Biocryst is one of the few startups recently to brave a cool biotech investment climate and attempt to proceed with an initial public offering. The company filed March 15 with the Securities and Exchange Commission for a 2 mil. share common stock and 2 mil. warrant offering. Net proceeds are estimated at $13.3 mil. (or $15.3 mil. if the 300,000 share and warrant over-allotment option is exercised in full), assuming an offering price of $7.50 per share of stock and 10 cents per warrant. Biocryst plans to use about $9 mil. of the proceeds for R&D, $1 mil. for facility expansion and equipment and the remainder for "working capital and other general corporate purposes," the prospectus states. With the offering, Biocryst estimates its capital will be sufficient to support programs until at least March 1994. The firm had $2.5 mil. in cash and equivalents at the beginning of 1993, including $1.2 mil. in proceeds from stock issued Jan. 13. Biocryst recorded a net loss of $4.1 mil. in 1992, compared to losses of $1.3 mil. in 1991 and $1.8 mil. in 1990. The loss reflects increased R&D expenses of $3 mil. in 1992, $706,807 in 1991 and $1 mil. in 1990. The firm completed a round of private financing totaling $3.6 mil. in October 1991. The company has PNP inhibitors in preclinicals for other T- cell mediated autoimmune diseases, including organ transplant rejection, rheumatoid arthritis and insulin-dependent diabetes. The inhibition of PNP "produces selective suppression of T-cells," Biocryst's IPO prospectus explains. Warner-Lambert and Ciba-Geigy have been granted options to separate families of compounds being developed for autoimmune diseases. Warner-Lambert and Biocryst entered an option agreement in October 1991 under which W-L has "advanced $70,500 to [Biocryst] to pay for related foreign patent costs while Warner-Lambert determines whether it has an interest in licensing a family of PNP inhibitors," the prospectus states. The firms began discussions in January; Warner-Lambert's option expires in July. Ciba-Geigy has had rights to options on six families of Biocryst's PNP inhibitors since 1987, one year after the startup was founded. Biocryst received $960,000 in research funding from Ciba-Geigy under the agreement, and $131,000 in payment and patent expenses in exchange for an option that subsequently lapsed. Rights to options on five groups have expired and Ciba has paid a fee of $100,000 and patent expenses of about $60,000 to retain the sixth option, which expires April 24. Biocryst also has three additional classes of compounds in discovery: influenza neuraminidase inhibitors, factor D inhibitors for cardiovascular applications, and aldose reductase inhibitors for complications of diabetes. The firm studied its protein target factor D in cystallography experiments on two separate space shuttle missions ("The Pink Sheet" June 29, 1992, T&G-6 and April 23, 1990, T&G-10). The firm applies technologies such as X-ray crystallography, protein nuclear magnetic resonance spectroscopy and computer molecular modeling in its "structure-based drug design," which uses "detailed structural knowledge of the active sites of protein targets associated with particular diseases," the filing explains.
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